Robinhood has announced that it will no longer support Cardano, Polygon, and Solana due to their classification as unregistered securities by the SEC in its lawsuits against Binance and Coinbase.
Robinhood, the popular cryptocurrency and stock trading app, has made a major announcement regarding its support for certain tokens. The company has decided to terminate its support for three tokens, namely Cardano (ADA), Polygon (MATIC), and Solana (SOL).
This decision comes in the wake of recent legal actions taken by the United States Securities and Exchange Commission (SEC) against prominent cryptocurrency exchanges Binance and Coinbase. Robinhood made the announcement through a Twitter thread on June 9, stating that it will cease supporting the aforementioned tokens starting from June 27 after conducting a thorough review.
The firm specifically cited the SEC’s lawsuits against Coinbase and Binance as the primary reason for the delisting, emphasizing that these legal actions have cast a cloud of uncertainty over the tokens in question. It is worth noting that these three tokens were the only ones supported by Robinhood that were implicated in the SEC lawsuits.
Despite the delisting, Robinhood reiterated its belief in the future of cryptocurrencies and expressed its commitment to advocating for regulatory clarity in the United States. The company recognizes the importance of providing customers with a sense of confidence and security when participating in the cryptocurrency marketplace. Therefore, it aims to work towards fostering an environment where regulatory guidelines are well-defined, enabling customers to engage in cryptocurrency trading with enhanced assurance.
The SEC’s legal actions against Binance and Coinbase serve as the backdrop for Robinhood’s decision. On June 5, the SEC filed a lawsuit against Binance, one of the world’s largest cryptocurrency exchanges, alleging the offering of unregistered securities.
Shortly thereafter, the regulator followed suit by lodging similar allegations against Coinbase, a prominent U.S.-based cryptocurrency exchange. The SEC specifically identified 13 tokens, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), as unregistered securities.
During a congressional hearing on June 6, Robinhood’s Chief Legal Compliance and Corporate Affairs Officer, Dan Gallagher, who also served as a former SEC commissioner, expressed his perspective on the challenges faced by crypto firms operating as registered broker-dealers in the United States.
Gallagher described the current approach outlined by the SEC as “crypto the hard way,” indicating the difficulties encountered in adhering to the regulatory framework even when Robinhood made diligent efforts to comply. He highlighted that Robinhood had undertaken a 16-month-long process of attempting to register a special purpose broker-dealer with the SEC, but in March, the company was informed that its efforts would not yield any results.
The SEC’s legal actions have sparked significant controversy among the crypto community, with many users criticizing the regulator for its perceived inconsistencies in dealing with digital asset firms. Notably, the lawsuit against Coinbase alleged that the exchange had been operating as an unregistered security broker since 2019, despite the fact that the company went public in April 2021. This disparity in treatment has raised questions about the SEC’s approach and its application of regulations within the cryptocurrency industry.