Robinhood will stop supporting 3 cryptocurrencies cited in SEC lawsuits

By: Michael Wilson

Robinhood will stop supporting 3 cryptocurrencies cited in SEC lawsuits

June 10, 2023 6:26 AM

The SEC's proceedings against Coinbase and Binance were mentioned as reasons for the delisting, with the business claiming that the cases "introduced a cloud of uncertainty" surrounding the coins.


In light of the recent legal measures taken by the US Securities and Exchange Commission (SEC) against cryptocurrency exchanges Binance and Coinbase, the cryptocurrency and stock trading app Robinhood has stated→ it will be discontinuing service for the currencies Cardano, Polygon, and Solana. 


Following a Twitter thread, Robinhood said on June 9 that it will discontinue support for the three coins beginning on June 27. The firm specifically referenced→ the SEC's actions as reasons for the delisting in a Twitter thread, claiming the Coinbase and Binance lawsuits "introduced a cloud of uncertainty" around the tokens — the only three circumstances which Robinhood supported.


"We have faith in the potential of cryptocurrency and will keep pushing for clearer regulations in the United States so that users can participate in trading with more confidence," Robinhood stated.

 


On June 5th, the SEC sued Binance, claiming that the exchange was offering unregistered securities. The SEC then made similar claims against Coinbase, a US-based cryptocurrency exchange, listing 13 tokens as unregistered securities, such as Cardano (ADA), Polygon (MATIC), and Solana (SOL).


Dan Gallagher, former SEC commissioner, and Robinhood's chief legal compliance and corporate affairs officer, told in a congressional hearing on June 6 that the present approach to operating as a licensed broker-dealer in the United States was like "crypto the hard way." He went on to say that the SEC's roadmap for crypto businesses was challenging to follow, even for Robinhood.


"When Chair Gary Gensler at the Securities and Exchange Commission in 2021 said, 'Come in and register,' we did," Gallagher explained. "We endured a 16-month process with SEC staff trying to get registered as a special purpose broker-dealer, after which we were told pretty summarily in March that the whole thing was over and we weren't going to see any fruits of that effort."

 

Many crypto users have expressed displeasure about the SEC proceedings, pointing out anomalies in the regulator's approach to dealing with digital asset enterprises. The lawsuit against Coinbase, for example, claimed that the exchange has been functioning as an unregistered security broker since 2019 and that the company will go public in April 2021.


Binance.US and Binance CEO Changpeng Zhao were also implicated in SEC cases against crypto exchanges for their alleged roles in unregistered token offers and sales, including BNB. On June 8, the US company declared it would suspend US currency deposits in reaction to the SEC's "extremely aggressive and intimidating tactics."