RobinhoodRobinhood has felt the heat from the ongoing crypto crackdown in the United States. In response to the Securities and Exchange Commission’s (SEC), recent lawsuits against two of the top crypto exchanges, Binance and Coinbase, American financial services company Robinhood announced on Friday that it would discontinue support for some of the crypto market tokens it currently offers on its platform.
According to the company, its examination of crypto offers led to the decision to discontinue support for Cardano (ADA), Polygon (MATIC), and Solana (SOL), all of which are in the top ten currencies in terms of market capitalization. It remains to be seen whether the platform will delist other coins.
Robinhood goes into a delisting spree after the recent SEC crackdown
Crypto assets face an existential threat in the United States, as the most recent regulatory assault is already causing major exchanges to reevaluate their offerings.
On Monday, June 5, the U.S. SEC launched an investigation into the two largest crypto exchanges, Binance and Coinbase. The lawsuit against Binance referred to certain tokens on the Binance platform as securities.
We regularly review the crypto we offer on Robinhood. Based on our latest review, we’ve decided to end support for Cardano (ADA), Polygon (MATIC), and Solana (SOL) on June 27th, 2023 at 6:59 PM ET. No other coins are affected and your crypto is still safe on Robinhood.
Robinhood
In the SEC’s litigation against Binance, the following tokens are mentioned: BNB, BUSD, Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXI), and COTI.
The financial service companhy holds a broker-dealer registration, allowing it to trade securities. However, Gallagher, a former SEC commissioner, does not believe that the license permits the company to reliably trade the cryptocurrencies listed in SEC filings.
However, none of the three coins, Cardano (ADA), Polygon (MATIC), and Solana (SOL), reacted immediately to the news of Robinhood’s delisting, while the crypto market remains sideways ahead of the US Federal Reserve’s interest rate announcement on June 14, 2023.
You can continue to buy, sell and hold ADA, MATIC, and SOL until the deadline. You will be able to transfer ADA, MATIC, and SOL until June 27th, 2023. (If you live in Hawaii or Nevada, you can’t buy ADA, MATIC, and SOL. If you live in New York, you can’t transfer ADA, MATIC, and SOL.)
Robinhood
The financial company explained the delisting procedure and told its costumes that, after the deadline, any ADA, MATIC, or SOL remaining in their Robinhood Crypto account will be sold for market value, with the revenues credited to their Robinhood purchasing power.
What delisting these crypto tokens means for Robinhood
A small but substantial portion of Robinhood’s revenue comes from cryptocurrency. The financial service company reported net revenues of $441 million during the first quarter of 2023. The company’s crypto revenues, totaling $38 million, represented less than 10% of total revenue.
It is essential to note that not every crypto token listed by the company is involved in the SEC lawsuit. However, Robinhood only serves consumers in the United States, limiting its geographic diversification options.
Payments for order flow constitute the preponderance of Robinhood’s revenue. This means that Robinhood sells the right to implement trades placed by customers to market makers. Market makers pay Robinhood a modest fee, a fraction of a penny per share, for this service.
Several crypto tokens have previously been recognized as securities by the US Securities and Exchange Commission. The regulatory agency added up to 16 new cryptocurrencies to the list of what it considers to be securities in the recent litigation, bringing the total to 67 tokens.
Nonetheless, the platform will continue to facilitate the trading of Bitcoin, Ethereum, Litecoin, Dogecoin, and Shiba Inu, among other cryptocurrencies.
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