Menlo Park-based financial services firm Robinhood has made a significant move in the cryptocurrency market by announcing the impending delisting of three prominent digital assets: Cardano (ADA), Solana (SOL), and Polygon (MATIC). The decision, disclosed in a blog post on June 9, comes in the wake of recent enforcement actions by the U.S. Securities and Exchange Commission (SEC) against major crypto exchanges, Binance and Coinbase.
Effective June 27, Robinhood users will no longer be able to trade or hold ADA, SOL, and MATIC on the platform. This move is part of the company's ongoing review of its cryptocurrency offerings, as it seeks to align with evolving regulatory requirements. The delisting specifically targets the 8th, 10th, and 11th largest digital assets by market capitalization, respectively.
In a statement released on Friday, Robinhood stated, "We regularly review the crypto we offer on Robinhood. Based on our latest review, we’ve decided to end support for Cardano (ADA), Polygon (MATIC), and Solana (SOL) on June 27th, 2023, at 6:59 PM ET." However, the company reassured its users that no other cryptocurrencies on the platform will be affected by this change and emphasized the continued safety of users' remaining crypto holdings.
The decision to delist these particular assets coincides with the SEC's intensified scrutiny of Binance and Coinbase, both of which are currently facing lawsuits from the regulatory authority. As a result, Robinhood initiated its review of coin offerings to determine the necessary actions to comply with regulatory standards. Dan Gallagher, Robinhood's Chief Legal Compliance and Corporate Affairs Officer, affirmed this, explaining to Bloomberg that the objective of the review is to "determine what, if any, actions to take."
It is worth noting that Robinhood will liquidate any ADA, MATIC, and SOL holdings remaining in users' accounts after the delisting deadline, selling them at market value and subsequently crediting the proceeds to users' buying power on the platform. However, users have the option to withdraw their assets before the deadline to avoid automatic liquidation, although this option may not be available in all states.
While Robinhood's announcement did not explicitly state its motive for delisting these assets, the correlation with the recent SEC lawsuits against Binance and Coinbase suggests a direct response. In the lawsuits, the three targeted cryptocurrencies were referred to as unregistered securities.
Responding to the situation, the Solana Foundation firmly dismissed the SEC's claim that SOL is a security, highlighting its nature as a community-driven project relying on decentralized engagement from users and developers. Similarly, IOG, the company behind Cardano, has disputed the notion that ADA should be classified as a security. Notably, there have been no public comments from any entity associated with Polygon regarding the matter.
In addition to Cardano, Solana, and Polygon, the SEC lawsuits identified several other digital assets, including BNB Chain (BNB), Binance USD (BUSD), Filecoin (FIL), Cosmos (ATOM), Algorand (ALGO), Internet Computer (ICP), and Dash (DASH), as securities subject to regulatory scrutiny.
Furthermore, the SEC has taken enforcement actions against various crypto projects independently, such as Augur (REP) and Tron (TRX), underscoring the regulatory agency's commitment to shaping the future of the cryptocurrency landscape.
Robinhood's decision to delist Cardano, Solana, and Polygon highlights the increasing regulatory pressure faced by the cryptocurrency industry. As the market continues to evolve, industry participants are compelled to adapt to a shifting regulatory landscape to ensure compliance and maintain the trust of their users.
