Crypto and fintech firm Robinhood with its head office in Menlo Park, California, intends to delist the 8th, 10th, and 11th largest cryptocurrencies by market capitalization on June 27.
- Robinhood will delist crypto assets ADA, SOL, and MATIC on June 27.
- Investors who still have ADA, SOL, and MATIC in their Robinhood accounts on June 27 will have those assets automatically sold on the market.
- The move by Robinhood comes days after these three crypto-assets were referred to as unregistered securities by the SEC in lawsuits against Binance and Coinbase.
- The Solana Foundation and Cardano development firm IOG have disputed the characterizations of Solana and Cardano as securities.
Robinhood to delist ADA, SOL, and MATIC
Robinhood, a crypto and fintech firm with its head office in Menlo Park, California, intends to delist the 8th, 10th, and 11th largest cryptocurrencies by market capitalization on June 27. In a decision disclosed through a blog post on June 9, Robinhood indicates that it will take off Cardano (ADA), Solana (SOL), and Polygon (MATIC) from its platform.
The announcement comes amid rising regulatory scrutiny of Coinbase and Binance by the US Securities and Exchange Commission (SEC). The SEC named ADA, SOL, and MATIC in lawsuits filed against Coinbase and Binance. The SEC referred to the three crypto-assets targeted for delisting from Robinhood as unregistered securities in the lawsuits. The lawsuits are part of a broader SEC endeavour to regulate the crypto industry.
Other crypto assets referred to as securities in the SEC lawsuits against Coinbase and Binance include but are not limited to Binance USD (BUSD), BNB Chain (BNB), Cosmos (ATOM), Filecoin (FIL), Algorand (ALGO), Dash (DASH) and Internet Computer (ICP). Additionally, SEC has taken enforcement actions against various crypto projects, including Tron (TRX) and Augur (REP).
Following lawsuits against the two leading crypto exchanges, Robinhood declared it would actively review its coin offerings. Dan Gallagher, Robinhood’s Chief Legal Compliance and Corporate Affairs Officer, indicated that this review would help determine any actions to take. One of Robinhood’s actions is to delist Cardano, Polygon, and Solana.
What Robinhood’s decision means for crypto investors
Robinhood will halt the trading of ADA, SOL, and MATIC on June 27. The company will automatically sell crypto assets from the three that investors/customers will still hold in Robinhood accounts at the removal time. As such, users can withdraw their ADA, SOL, and MATIC before the delisting if they would rather not have their crypto assets sold.
The Solana Foundation has dismissed SEC’s claim that SOL is an unregistered security. According to the foundation, SOL is a community-based project operating on decentralized developer and user engagement.
“The Solana Foundation strongly believes that SOL is not a security,” the Solana Foundation said in a statement. “SOL is the native token to the Solana blockchain, a robust, open-source, community-based software project that relies on the decentralised user and developer engagement to expand and evolve.”
Cardano’s development company IOG has equally disputed that ADA is a security. There have been no public comments from any entity associated with Polygon. According to IOG, the SEC lawsuits against Coinbase and Binance contain several factual inaccuracies. The IOG also adds that understanding the fundamental blockchain principles remains crucial in adopting responsible crypto regulation frameworks.
Moreover, the company said that regulating the crypto industry through enforcement does not offer the necessary certainty or clarity that the consumers deserve. The price of ADA fell 3 per cent on the day as tokens named in the SEC lawsuit extended their sell-off as traders reacted to regulatory risk.
Challenges in the crypto industry persist
It is safe to say that the crypto industry has been ailing for some time. The industry seemed to flourish, with growth and attention hitting record levels. However, in November 2022, something terrible happened. The crypto industry got a deadly dose of the FTX apocalypse. The industry hit the headlines but not in the manner many envisioned. Most claims that the cryptocurrency market is fraught with scams and frauds appeared to be confirmed globally.
The FTX contagion plunged the crypto market into winter, with the situation looking dire. And then, somewhat mysteriously, the industry recovered in the wake of 2023. Markets prices shot back and thawed as the crypto industry headed for a spring. The industry appeared to achieve much-awaited stability.
This week crypto is back in the headlines, with SEC lawsuits against Coinbase and Binance. This has been followed closely by Robinhood’s decision to delist ADA, SOL, and MATIC. The recent developments point to the prevailing challenges in the crypto industry. Many have stated that regulation can help solve most of these challenges and salvage the industry’s reputation. While crypto regulation could prove useful, a pragmatic approach to regulation remains necessary.