Robinhood, one of the most popular trading platforms in the United States, has announced to its millions of customers that it will no longer support certain cryptocurrencies that have been designated as “securities” by the US Securities and Exchange Commission (SEC).
In a notice sent to its customers, Robinhood stated that it would halt withdrawals of Solana (SOL), Polygon (MATIC), and Cardano (ADA) on June 26, 2023, and trading of these tokens will be halted on June 27, 2023.
The move by Robinhood comes as a result of the ongoing regulatory crackdown on cryptocurrency exchanges, including Binance and Coinbase, which are facing lawsuits over allegations of selling unregistered securities.
Robinhood Ceases Support For SEC-Regulated Coins
In a notice sent to its customers, Robinhood stated that it would no longer support the tokens that the SEC has designated as securities, citing regulatory uncertainty as the reason for the move.
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It is important to note that this decision only affects SOL, MATIC, and ADA, and not other cryptocurrencies supported by the platform. Users will still be able to trade and withdraw other cryptocurrencies on Robinhood.
This move by Robinhood is likely a response to the SEC’s increased scrutiny of cryptocurrency exchanges and their offerings. The SEC has deemed certain cryptocurrencies, including XRP, ADA, SOL, and MATIC to be securities, and exchanges that offer these tokens may be subject to regulatory action.
By halting support for certain tokens designated as securities, Robinhood is likely trying to protect itself from potential regulatory action and ensure compliance with SEC requirements.
The SEC’s crackdown on cryptocurrency exchanges is seen as part of a broader effort to regulate the cryptocurrency market, which has grown rapidly in recent years. While cryptocurrencies like Bitcoin and Ethereum are not considered securities by the SEC, other tokens, such as those sold in initial coin offerings (ICOs), have been deemed to be securities, and are subject to the same regulatory requirements as traditional securities.
It remains to be seen how other exchanges and trading platforms will respond to the SEC’s crackdown on cryptocurrencies designated as securities. However, the move by Robinhood is likely to be seen as a significant development in the ongoing regulatory debate surrounding cryptocurrencies and their place in the financial landscape.
Featured image from Unsplash, chart from TradingView.com