Robinhood to drop 3 tokens involved in SEC lawsuits.
The cryptocurrency and stock trading app Robinhood has announced that it will no longer support Cardano, Polygon, and Solana. These tokens have been labeled as unregistered securities by the United States Securities and Exchange Commission (SEC) in the recent legal actions taken against crypto exchanges Binance and Coinbase.
Robinhood stated in a June 9 update that it will end support for the three tokens starting on June 27th after conducting a review. The firm cited the SEC’s actions as the reason for the delisting, saying that the Coinbase and Binance lawsuits “introduced a cloud of uncertainty” around the tokens, which were the only three supported by Robinhood.
Robinhood said, “We believe in the future of crypto and will continue to advocate for regulatory clarity in the U.S. so that customers can participate in the marketplace with greater confidence.”
Earlier this week, the SEC sued crypto 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 followed with similar allegations against Coinbase, naming 13 tokens, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), as unregistered securities.
Dan Gallagher, former SEC commissioner and Robinhood’s chief legal compliance and corporate affairs officer, testified in a congressional hearing on June 6 that the current approach to operating as a registered broker-dealer in the U.S. was like “crypto the hard way.” Gallagher added that the path laid out by the SEC for crypto firms was difficult to follow, even when Robinhood tried.
The SEC cases have caused outrage among many crypto users, who have pointed out inconsistencies in the regulator’s approach to handling digital asset firms.
Binance.US and Binance CEO Changpeng Zhao were also named in the SEC’s cases against the crypto exchanges for their alleged roles in unregistered offers and sales of tokens, including BNB (BNB). The U.S. entity announced on June 8 that it would be suspending U.S. dollar deposits in response to the SEC’s “extremely aggressive and intimidating tactics.”
Related: SEC lawsuits: 67 cryptocurrencies are now seen as securities by the SEC.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?