The 2Z token lost most of its value minutes after trading began despite a SEC no-action letter. Retail traders, listing exchanges and internal compliance teams are now dealing with the fallout. Basic supply mechanics and an airdrop as the key triggers behind the slide.
A regulatory green light did not stop the price collapse. Although the SEC had issued a no-action letter, buyers were not reassured enough to overcome concerns about how supply would reach the market.
The drop to three plain facts: 3.4 billion coins reached the market on day one, the code places no limit on future minting, and 96.5% of the total supply sits behind a slow, multi-year unlock. These numbers scared buyers more than the regulatory clearance reassured them, leaving the market vulnerable to immediate selling pressure.
Early trading, regulatory context and the drivers of the slide
A Binance HODLer Airdrop added extra coins to wallets that had never paid for them, and recipients sold at once, amplifying the downward move. The event proves that a legal stamp does not replace a supply schedule that makes sense. The supply schedule — defined as the written rules for supply, issuance and distribution — failed here.
Investors who watched the price fall may not return even though the SEC letter still stands; unlock dates will keep liquidity lumpy; new coins can appear without a cap; and exchanges will spend more time vetting numbers before they list the next project.
These facts form the core of the episode and explain why regulatory approval did not translate into price support. They also set expectations for liquidity patterns as unlocks approach and as any fresh minting appears.
Regulatory approval is only the first step. Without a transparent, limited supply plan, price collapse follows. Observers should track the unlock calendar and any new minting closely.
