Robinhood Removes Cryptocurrencies
The prices of the cryptocurrencies seem to be receiving blow after blow. When the Securities and Exchange Commission (SEC) sued the two crypto exchanges Binance and Coinbase, the price already fell sharply. The SEC designated the three tokens, Solana (SUN), Cardano (ADA), and Polygon (MATIC), along with dozens of others, as securities. A platform is not allowed to sell securities in the US without the proper permits. Because of trading in these cryptocurrencies, the exchanges would therefore be in violation.
Uncertainty for Exchanges
This brought a lot of uncertainty about the position of other exchanges. The SEC is quite aggressive in its claims and labeled the crypto market as “full of touts, scammers, and Ponzi schemes.” Instead of diplomatically resolving the problems in the market, the SEC directly sues the exchange if they believe it is breaking the law. This instills major fear for the exchanges that trade in tokens labeled as securities but have not yet been sued.
To avoid the risk, the popular exchange Robinhood has withdrawn the tokens Solana (SOL), Cardano (ADA), and Polygon (MATIC) from trading. On June 9, the exchange announced that they will no longer support these three tokens. Traders have until June 27 to collect their tokens from the platform. After the deadline, any remaining ADA, MATIC, and SOL in their wallets will be sold for market value, and the proceeds can be kept by the traders.
Impact on Token Prices
Robinhood’s announcement sent the prices of the three tokens into the deep red. According to CoinMarketCap, Cardano took the biggest hit with a drop of 37.7% in the past seven days. Polygon follows closely behind, with a decrease of 37%. Solana experienced a relatively lighter hit and is down 32% in value.
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Robinhood indicated that the deletion of these three tokens would not affect the rest. However, this news fell on deaf ears as other cryptocurrencies also experienced a decline in value. Binance Coin (BNB) and Dogecoin (DOGE) have each fallen more than 10% in the past 24 hours. XRP decreased by 7%. Market leaders Bitcoin (BTC) and Ethereum (ETH) are down 4.3% and 6.2% respectively in the last 24 hours.