Robinhood (HOOD) has decided to remove certain crypto assets from its trading platform after the Securities and Exchange Commission classified them as unregistered securities.
Cardano (ADA), Polygon (MATIC) and Solana (SOL) are being delisted after being named in SEC lawsuits filed this week against crypto exchanges Binance and Coinbase (COIN). The lawsuits are part of a broader effort by the SEC to regulate cryptocurrencies.
The central theses
- Crypto assets ADA, MATIC and SOL will be delisted from Robinhood on June 27th.
- Users who still have ADAM, MATIC, or SOL in their Robinhood accounts as of June 27 will have those assets automatically sold on the market.
- Robinhood’s move comes days after these three crypto assets were labeled unregistered securities by the SEC in lawsuits against Binance and Coinbase.
- The Solana Foundation and Cardano development company IOG have disputed the classification of Solana and Cardano as securities.
What does this mean for your investments?
Robinhood will suspend trading of ADA, MATIC and SOL on June 27th. All customers who have these three crypto assets in their Robinhood accounts at the time of removal will have them automatically sold on the market.
This means users can simply withdraw their ADA, MATIC and SOL before delisting if they would rather not sell the assets. However, the ability to withdraw these crypto assets is not available in every state.
Although not specifically mentioned in the announcement, this move by Robinhood appears to be a direct response to the recent SEC lawsuits against Binance and Coinbase, as the three crypto assets that were scheduled to be removed from the platform were listed as unregistered in these complaints Securities were referred to.
On Thursday, the Solana Foundation rejected the claim that SOL is a security, saying it is a community-driven project based on decentralized engagement from users and developers.
Cardano’s development company IOG has also disputed the notion that ADA is a security. There were no public comments from any company affiliated with Polygon on this matter.
Other crypto assets identified as securities in the lawsuits against Binance and Coinbase include BNB Chain (BNB), Binance USD (BUSD), Filecoin (FIL), Cosmos (ATOM), Algorand (ALGO), Internet Computer (ICP) and Dash (DASH).
Additionally, SEC enforcement actions have been taken directly against a number of crypto projects such as Augur (REP) and Tron (TRX).
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