The financial services firm Robinhood, headquartered in California, has announced that it will remove tokens, such as Cardano, Polygon, and Solana, that were classified as securities in the recent lawsuits filed by the U.S. Securities and Exchange against Binance and oinbase">Coinbase, beginning on June 27.
In a statement, Robinhood assured its users that their cryptocurrency holdings are secure on their platform and emphasized that only the tokens mentioned in the recent lawsuits by the U.S. Securities and Exchange against Binance and oinbase">Coinbase will be delisted, while no other coins will be impacted.
Solana, Polygon, and Cardano, among other tokens, have disputed the Securities and Exchange Commission’s classification of these assets as securities, despite the regulatory body’s unilateral decision. These three tokens are among the top 20 cryptocurrencies in terms of market capitalization, and together, they have a combined value of over $21 billion.
The U.S. Securities and Exchange Commission (SEC) recently targeted Binance and oinbase">Coinbase, two of the largest global cryptocurrency exchanges, alleging that Binance commingled client funds, sold unregistered securities, and operated an unregistered exchange, while the SEC claimed that oinbase">Coinbase, the largest cryptocurrency exchange in the United States, was unlawfully functioning as a clearing agency, brokerage, and unlicensed securities exchange.
The Securities and Exchange Commission (SEC) filed lawsuits against two of the world’s largest cryptocurrency exchanges, Binance and oinbase">Coinbase, last week, alleging that Binance engaged in unregistered exchange operations, sold unregistered securities, and mixed customer funds, while oinbase">Coinbase, the largest cryptocurrency exchange in the United States, was accused of operating as an unlicensed securities exchange, brokerage, and clearing agency.
As part of this action, the Securities and Exchange Commission (SEC) classified Cardano, Polygon, and Solana as securities, which have been challenged by these tokens. Solana has expressed disagreement with the SEC’s characterization of it as a security, while Polygon has focused on a different legal argument, asserting that it is a global entity and not subject to U.S. jurisdiction, stating that it was made available to a broad range of individuals but with no targeted actions towards the United States, according to Polygon Labs.
According to Peter Eberle, the CIO of Castle Funds and a crypto expert, itcoin">Bitcoin is considered a safer investment option since there is regulatory clarity regarding its classification. The Securities and Exchange Commission (SEC) has consistently maintained that itcoin">Bitcoin is not a security, which provides a level of certainty for investors.
Robinhood, a platform that garnered substantial attention amidst the GameStop meme stock phase, has adopted a prudent approach to safeguard its relatively nascent cryptocurrency division from any potential legal scrutiny.
According to Dan Gallagher, the Chief Compliance Lawyer at Robinhood Markets, the company complied with the directive of SEC Chair Gary Gensler to register with the regulatory body in 2021.
Furthermore, Gallagher stated that the company underwent a rigorous 16-month procedure with the SEC staff to register a special purpose broker-dealer. However, in March, the company was informed that the process had concluded abruptly and that they would not reap any benefits from their efforts.
Nonetheless, Robinhood has recently observed a significant reduction in its cryptocurrency trading volume, with a decline of $2.1 billion last month, indicating a 43% drop from April. Furthermore, the company’s yearly trading volume for cryptocurrency has declined by nearly 70%.
#Robinhood #Cardano #Polygon #Solana #SEC #Delisting #Binance #oinbase">Coinbase
