Robinhood to End Support for Three Tokens Following SEC Lawsuits
Robinhood, the cryptocurrency and stock trading app, has announced that it will no longer support Cardano, Polygon, and Solana. The decision to delist these tokens came after a review and was based on the United States Securities and Exchange Commission’s (SEC) recent legal actions against Binance and Coinbase, which labeled the tokens as unregistered securities.
Robinhood’s decision to delist
In an update on June 9, Robinhood stated that it would end support for the three tokens starting on June 27. The firm specifically cited the SEC’s recent actions as reasons for the delisting. The Coinbase and Binance lawsuits “introduced a cloud of uncertainty” around the tokens and were the only three in the cases that Robinhood supported.
“We believe in the future of crypto and will continue to advocate for regulatory clarity in the U.S. so that customers can participate in the marketplace with greater confidence,” said Robinhood.
SEC lawsuits against Binance and Coinbase
On June 5, the SEC filed a lawsuit against Binance, alleging that it offered unregistered securities. The regulator followed with similar allegations against Coinbase, naming 13 tokens, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), as unregistered securities.
Robinhood’s chief legal compliance and corporate affairs officer, Dan Gallagher, testified in a congressional hearing on June 6, calling the current approach to operating as a registered broker-dealer in the U.S. “crypto the hard way.” Gallagher also commented that the path laid out by the SEC for crypto firms was difficult to follow, even when Robinhood tried.
Outrage in the crypto community
The SEC’s cases have raised concerns among many crypto users about the regulator’s handling of digital asset firms. For example, the lawsuit against Coinbase alleges that the exchange has been operating as an unregistered security broker since 2019, while the firm also went public in April 2021.
Binance.US and Binance CEO Changpeng Zhao were also named in the SEC’s cases against the crypto exchanges for their alleged roles in unregistered offers and sales of tokens, including BNB. In response, the U.S. entity announced on June 8 that it would be suspending U.S. dollar deposits due to the SEC’s “extremely aggressive and intimidating tactics.”
Regulatory clarity for the crypto market
Robinhood’s decision to delist the three tokens highlights the need for regulatory clarity in the crypto market. Cryptocurrency firms in the U.S. are required to navigate a complex regulatory landscape that often lacks clarity, making it difficult to operate as registered broker-dealers.
As the crypto market continues to grow, it is essential that regulators provide clear and concise guidelines to ensure that firms can operate legally and with confidence. Until then, the industry will continue to face uncertainty and the risk of legal action, which could hinder growth and innovation.
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