Robinhood, a US-based investment app that offers commission-free trading of stocks, ETFs, options, and cryptocurrencies, is reportedly delisting three popular crypto assets, Solana (SOL), Cardano (ADA), and Polygon (MATIC), in response to the US Securities and Exchange Commission (SEC) suing Binance and Coinbase for allegedly violating securities laws. The news sent the trio of assets downwards, with SOL trading for $18.62 at the time of writing, ADA moving for $0.311, and MATIC settling at $0.762.
Robinhood’s chief legal officer, Dan Gallagher, told members of Congress that the firm is delisting the smart contract platforms since the SEC cracked down on the digital asset industry earlier this week. He also said that Robinhood will be reviewing its crypto options moving forward. Gallagher, a former commissioner of the regulatory agency, stated that Robinhood is “actively reviewing” the SEC’s complaints “to determine what, if any, actions to take.”
Robinhood, one of the most popular investment apps in the world, has also offered 18 crypto assets to customers globally. According to a Bloomberg report, the SEC’s lawsuits indicate that the three digital assets qualify as securities, and thus offering them would qualify Robinhood as selling unregistered securities. To avoid regulatory trouble, Robinhood chose to remove the three crypto assets from its platform.
The SEC is arguably the most powerful financial regulatory body worldwide and has recently been aggressively cracking down on companies allegedly violating securities laws. The SEC filed lawsuits against both Binance and Coinbase, the world’s two biggest crypto exchange platforms, earlier this week. The regulator alleges that the two have flouted regulations in offering products that qualify as securities but haven’t been registered as such.
Robinhood’s move to delist the three crypto assets wasn’t unprecedented. In a similar move, leading crypto exchange Binance had previously announced that it would stop offering services to users in Ontario, Canada, after a warning from the Ontario Securities Commission (OSC). The regulator stated that Binance violated provincial laws by offering trade services for cryptocurrency derivatives that qualify as securities. This shows how regulatory crackdowns can cause market shake-ups and affect the value of digital assets.
It is uncertain how Robinhood’s delisting will affect the three crypto assets in the long term. However, the immediate reaction showed a dip in their value. Solana is a high-speed blockchain that offers fast and cheap transactions and has garnered attention for its low transaction fees and high throughput. Cardano is a smart contract platform that rivals Ethereum, and Polygon offers low-cost and fast transactions.
Investors and traders in digital assets should be aware of how regulatory shift can affect market stability. Any business offering crypto-related services or products should keep up to date with the regulations to avoid regulatory action. Digital assets are high-risk investments, and any losses incurred are the investor’s responsibility. The Daily Hodl advises that investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets.
In summary, Robinhood has removed three popular crypto assets from its platform to avoid regulatory trouble, following the SEC’s lawsuits against Binance and Coinbase. The SEC alleges that the three digital assets qualify as securities and thus offering them without registering would violate securities laws. Robinhood’s decision to remove the assets from its platform to comply with regulatory demands highlights how regulatory issues can affect digital assets. Investors should remain vigilant and informed when investing in the digital asset market.