US-based digital trading app Robinhood today announced that it will end support for three major cryptocurrencies on June 27: Cardano (ADA), Polygon (MATIC), and Solana (SOL).
The company advised users to sell or transfer their holdings before the deadline, after which the tokens will be automatically sold and converted into purchasing power on the app.
Robinhood said it made the decision following one of its regular reviews of the industry, but did not reveal the exact reason behind the delisting.
“Investment contracts”
Polygon, Cardano, and Solana native tokens were recently designated as securities by the SEC in its lawsuits against Coinbase and Binance.
The regulator claims that these tokens are securities because they were initially issued as a fundraising tool for the companies behind them and buyers were “reasonably” expected to use their investments to grow the projects that would generate profits for them.
SEC Chairman Gary Gensler clarified in public remarks yesterday that, according to the SEC, these tokens meet the definition of an investment contract — itself a class of securities — under the Howey test. The watchdog lawsuit also lists FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO as securities.
Robinhood’s decision to delist three of the listed cryptocurrencies from its platform comes in the same week that the SEC filed its landmark lawsuits against the crypto giants. The company is silent on whether the enforcement action influenced the decision.
The company’s primary market is the US and ensuring compliance with laws and regulations is a matter of survival.
Whether the SEC will expand the list to include other cryptocurrencies or how its actions will affect the industry is unclear for now. However, now that the SEC has formally stated its position and filed suit accordingly, the question will now move from the court of public opinion to the courts themselves.
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