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Cryptocurrency and stock trading app Robinhood has announced the end of support for Cardano, Polygon and Solana, all tokens labeled as non-registered securities by the U.S. Securities and Exchange Commission (SEC) in its recent lawsuits against cryptocurrency exchanges Binance and Coinbase.
In an update on June 9th, Robinhood stated that it will end support for the three tokens starting June 27th after review. In a Twitter thread, the firm specifically cited the SEC’s actions as the reason for the delisting, saying that the Coinbase and Binance lawsuits “brought a cloud of uncertainty” around the tokens – the only three in cases Robinhood has backed.
“We believe in the future of cryptocurrencies and will continue to advocate for regulatory clarity in the US so that customers can participate in the market with greater confidence,” Robinhood said.
Earlier this week, the SEC sued cryptocurrency companies Binance and Coinbase. The SEC has alleged that a number of cryptocurrencies trading on those platforms are unregistered securities, including three that are currently supported on Robinhood Crypto. (1/4)
— Robinhood (@RobinhoodApp) June 9, 2023
On June 5, the SEC filed a lawsuit against Binance for allegedly offering unregistered securities. The regulator has filed similar allegations against Coinbase, a U.S.-based cryptocurrency exchange, calling 13 tokens, including Cardano (ADA), Polygon (MATIC) and Solana (SOL), unregistered securities.
Former SEC Commissioner and Robinhood Chief Legal and Corporate Affairs Officer Dan Gallagher testified at a congressional hearing on June 6 that the current approach to operating as a registered broker-dealer in the US is like “cryptocurrency the hard way.” He added that the path laid out by the SEC for crypto firms was difficult to follow, even when Robinhood tried.
“When the chairman [Гэри] Gensler at the SEC in 2021 said, “Come on in and register,” we did it,” Gallagher said. “We went through a 16-month process where SEC officials tried to register a special purpose broker-dealer, and then in March we were told quite briefly that the process was complete and we would not see any fruit of that effort.”
Related: SEC Lawsuits: 67 Cryptocurrencies Now Treated as Securities by the SEC
The SEC cases have sparked outrage among many cryptocurrency users who have pointed to inconsistencies in the regulator’s approach to dealing with digital asset companies. For example, the lawsuit against Coinbase alleged that the exchange has been operating as an unregistered securities broker since 2019, and the firm also went public in April 2021.
Binance. The US and Binance CEO Changpeng Zhao have also been featured in SEC cases against cryptocurrency exchanges for their alleged role in unregistered offerings and sales of tokens, including BNB (BNB). On June 8, the US organization announced that it would suspend US dollar deposits in response to “extremely aggressive and the intimidation tactics of the SEC.”