Robinhood Ends Support for Cardano, Polygon, and Solana To Avoid SEC Scrutiny

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Robinhood, the renowned cryptocurrency and stock trading app, has ended its support for three prominent cryptocurrencies: Cardano, Polygon, and Solana. This decision comes in light of recent legal actions by the United States Securities and Exchange Commission (SEC) against major crypto exchanges, namely Coinbase and Binance. The SEC has labeled these three tokens as unregistered securities, casting a pall of uncertainty over their status and precipitating Robinhood’s move to delist them.

SEC’s Action Shrouds Crypto Market in Uncertainty

Robinhood’s official announcement came on June 9, stating the cessation of support for these three tokens will take effect from June 27, due to a meticulous review. In a series of posts on Twitter, Robinhood specifically cited the SEC’s actions against Coinbase and Binance as the main reasons for its decision.

The lawsuits brought against these exchanges have introduced an “atmosphere of uncertainty” around the tokens, all three of which had been supported by Robinhood.

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Robinhood remains committed to the future of cryptocurrencies, pledging to continue advocating for clearer regulation in the United States. This will allow customers to engage in the crypto marketplace with increased confidence.

Legal Actions Against Major Crypto Exchanges Affects Robinhood

On June 5, the SEC filed a lawsuit against Binance, accusing the platform of offering unregistered securities. Shortly after, the regulator leveled similar allegations against Coinbase, a U.S.-based crypto exchange, and named 13 tokens, including Cardano, Polygon, and Solana, unregistered securities.

Former SEC commissioner and Robinhood’s current Chief Legal Compliance and Corporate Affairs Officer, Dan Gallagher, testified in a congressional hearing on June 6. He equated operating as a registered broker-dealer in the U.S. to navigating the crypto space “the hard way.” Gallagher added that the roadmap provided by the SEC for crypto firms was challenging to follow, a sentiment underscored by Robinhood’s own experiences.

Gallagher noted, “When Chair [Gary] Gensler at the SEC in 2021 said, ‘Come in and register,’ we did. We embarked on a 16-month process with the SEC staff to register a special purpose broker-dealer, only to be told rather abruptly in March that the process was over and we would not reap any benefits from our efforts.”

Crypto Community Reacts to SEC’s Actions

These lawsuits by the SEC have sparked an outcry among the crypto community, with many users highlighting inconsistencies in the regulator’s approach to dealing with digital asset firms.

For instance, the lawsuit against Coinbase alleges that the exchange has been operating as an unregistered security broker since 2019. This is even though the firm went public in April 2021.

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