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Robinhood Will Cease Supporting Tokens Classified as Securities in SEC Lawsuit

The California-based crypto trading platform Robinhood announced plans to delist three crypto assets the US Securities and Exchange Commission listed as securities. In a blog post, the Robinhood group stated that it would no longer support the operation of Cardano (ADA), Solana (SOL), and Polygon (MATIC) from June 27, 6:69 PM ET.

Before then, the Robinhood team will allow the customers to buy and sell the three tokens through the mobile application. As of June 27, the trading platform will sell off the token on the user account at a considerable market value.

Robinhood to Delist Three Token

According to the report, the Robinhood team confessed that after conducting their regular review, the firm decided to abandon listing the three crypto assets. News concerning the listing of Solana, Polygon, and Cardano as securities compelled Robinhood to pursue ways to comply with the SEC regulations.

On June 5, the SEC filed a lawsuit against Binance for offering unregistered securities to the public. Days after, the SEC sued the largest crypto exchange in the US by trading volume, Coinbase, for failing to register as a security broker in 2019.

Consequently, the SEC accused Binance and the chief executive Changpeng Zhao of providing the customers with unregistered cryptos. On June 8, Binance US revealed plans to suspend fiat withdrawals and dollar deposits due to regulatory tussle.

In their report, the crypto exchange labeled SEC’s legal action as aggressive and intimidating.

SEC Accuses Binance and Coinbase for Non Compliance

Following the recent legal blow, the SEC classified nineteen crypto assets as securities. In a Twitter statement, the Robinhood team argued that the SEC’s legal action would introduce uncertainty in the crypto asset listed on its trading platform. 

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After analyzing the SEC list, the Robinhood team noted that only three cryptos were affected.In their statement, the Robinhood team vowed to continue pushing for regulatory clarity for crypto assets in the US. 

The trading platform will pursue ways to restore customer confidence in the crypto space. On June 28, the trading platform will support the operation of 15 crypto assets not listed as securities by the SEC. This digital asset will include Bitcoin (BTC), Ether (ETH), Avalanche (AVAX), and Dogecoin (DOGE), among others. 

Speaking at the US House of Representatives, an official from Robinhood criticized the SEC crypto regulation. The trading platform has been seeking to register as a special-purpose brokerage firm for crypto assets. 

The official lamented that efforts made by the Robinhood team to comply with the registration requirements failed to see the light due to a lack of proper guidance from the SEC.

However, the official acknowledged that some of the employees working for the commission were willing to support Robinhood in obtaining the special-purpose broker registration approval.

Robinhood Fails to Obtain Special Purpose Broker Registration

In a subsequent statement from Robinhood’s legal team, Dan Gallagher confessed that Robinhood had worked closely with the SEC employees for the past 16 months to acquire the special purpose broker dealership registration. 

Gallagher confirmed receiving a report from the SEC concerning completing the special purpose broker-dealer registration in March. Since then, the SEC has not issued further information concerning Robinhood registration.

In 2021 the SEC chair Gary Gensler invited crypto firms to register with the commission to offer special-purpose broker services to the public. Gensler’s announcement inspired Robinhood to broaden its market presence by diversifying its product line.

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ADA, SOL and MATIC Market Outlook

Reflecting on listing of the nineteen cryptos, the Solana Foundation and Cardarno vehemently refuted the SEC claims. They argued that the crypto assets are not securities based on the features exhibited by ADA, MATIC, and SOL.

A close examination of the market performance of the three crypto-assets revealed that ADA, SOL, and MATIC reacted to the SEC news.

As of this publication, 08:36 UTC, MATIC has jumped by 2.04% to trade at $0.6034. Cardano’s native token ADA, on the other hand, has increased by 8.15% to trade at $0.2628 in a day. 

Per CoinMarketCap, Solana (SOL) has gathered bullish steam to exchange hands at $15.45, a 3.95% surge in the last 24 hours.

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Kimberly Crain

Kimberly Crain is a seasoned crypto trader and writer, offering valuable insights into the digital asset market. With expertise in trading strategies and a passion for blockchain technology, her concise and informative articles empower readers to navigate the evolving world of cryptocurrencies.

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