Robinhood pulls the plug on MATIC, SOL, ADA amid SEC crackdown Robinhood pulls the plug on MATIC, SOL, ADA amid SEC crackdown
Users were advised to sell or transfer their holdings before the deadline, at which point the tokens will be automatically sold and converted to buying power on the app.
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Updated: Jun. 9, 2023 at 4:09 pm UTC
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U.S.-based digital trading app Robinhood announced today that it will end support for three major cryptocurrencies on June 27 — Cardano (ADA), Polygon (MATIC), and Solana (SOL).
The company advised users to sell or transfer their holdings before the deadline, at which point the tokens will be automatically sold and converted to buying power on the app.
Robinhood said it made the decision after one of its regular reviews of the sector but did not disclose the exact reason behind the delisting.
“Investment contracts”
Polygon, Cardano, and Solana’s native tokens were recently labeled as securities by the SEC in its lawsuits against Coinbase and Binance.
The regulator claims these tokens are securities because they were initially issued as a fundraising tool for the companies behind them and buyers were “reasonably” led to expect that their investments would be used to grow the projects which would yield profits for them.
SEC Chair Gary Gensler clarified in public remarks yesterday that, in the SEC’s view, these tokens meet the definition of an investment contract—itself a category of securities—under the Howey Test. The watchdog’s lawsuit also lists FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO as securities.
Robinhood’s decision to delist three of the cryptocurrencies mentioned in the list from its platform comes during the same week that the SEC filed its landmark lawsuits against the crypto giants. The company has remained silent on whether the enforcement actions influenced the decision.
The company’s primary market is the U.S. and ensuring regulatory compliance is a matter of survival.
Whether the SEC will expand the list to include other cryptocurrencies or how its actions will impact the industry is unclear for now. However, now that the SEC has formally made its position known and filed suit accordingly, the question will now pass from the court of public opinion to the courts themselves.
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Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.
