Legal investigations can significantly impact cryptocurrency prices for the following reasons:

Concern over regulations: When authorities announce legal investigations or regulatory actions against cryptocurrency exchanges or projects, investors worry about tightening regulations and laws, which could negatively impact the market.

Loss of confidence: Investigations may point to illegal practices or fraud, which can lead to a loss of confidence in the cryptocurrency ecosystem in general, and prompt investors to sell their assets.

Reduced liquidity: When investors withdraw due to fear of investigations, liquidity in the market decreases, which increases price volatility and leads to a decline.

Stop services: In some cases, investigations can lead to the shutdown or restriction of trading platform services, making it difficult for investors to access their funds or trade freely, leading to selling pressure.

These factors combined typically lead to a decline in cryptocurrency prices in the market.