Robinhood Delists Crypto Offerings Amidst SEC Lawsuits

Crypto firms are already struggling with the impact just days after the U.S. Securities and Exchange Commission (SEC) sued cryptocurrency exchanges Binance and Coinbase for selling unregistered securities.

The SEC recently announced charges against Binance, alleging that Binance USD and BNB are unregistered securities. The commission's documents also identified ten other digital currencies, including ADA, SOL, FIL, MATIC, ATOM, MANA, SAND, ALGO, AXS, and COTI, as unregistered securities. Additionally, the SEC charged cryptocurrency exchange Coinbase on Tuesday, accusing it of operating its platform as an unregistered national securities exchange, broker, and clearing agency. The SEC stated that Coinbase has been conducting an unregistered securities offering through its staking-as-a-service program since 2019.

Robinhood, the popular brokerage, is reportedly assessing its cryptocurrency offerings in response to recent actions taken by the US Securities and Exchange Commission (SEC) against certain digital asset trading platforms, including Binance, according to a report by Bloomberg. The company's legal chief, Dan Gallagher, apparently informed the US Congress that Robinhood is carefully examining its cryptocurrency offerings and actively reviewing the SEC's analysis to determine the appropriate actions to take.

While Robinhood is known for its stock trading services, it also provides cryptocurrency trading to its users. However, it currently offers a limited selection of 18 cryptocurrencies for trading, with well-known coins such as Bitcoin, Ethereum, Solana, and Dogecoin being included in the list.

In a blog post, Robinhood stated that based on their latest review, they have decided to end support for Cardano (ADA), Polygon (MATIC), and Solana (SOL) on June 27th, 2023 at 6:59 PM ET. The platform assured users that their other cryptocurrencies are unaffected, and their crypto assets remain secure on Robinhood.

Until the deadline, users will still be able to trade and transfer the three tokens within the app. However, after support is discontinued on June 27th, any remaining tokens in a user's account will be automatically sold at market value, as stated by Robinhood.

This decision is part of Robinhood's routine cryptocurrency review. These three tokens were the only ones listed on the platform that were mentioned as securities in the recent SEC lawsuits.

Following the delisting, Robinhood will continue to offer trading services for 15 different cryptocurrencies, including bitcoin (BTC), ether (ETH), dogecoin (DOGE), and avalanche (AVAX). None of these tokens were implicated as securities in the SEC lawsuit.

During a recent testimony in the U.S. House of Representatives, Robinhood revealed that it attempted to register as a special-purpose broker for digital assets but encountered challenges in obtaining guidance from the SEC for crypto compliance. While the SEC staff appeared willing to assist, the process was ultimately discontinued.

Solana and Cardano have both rejected claims of being securities, while Polygon declined to comment on the matter. Following the SEC lawsuits, these three tokens experienced a minor impact earlier in the week but remained mostly unchanged on Friday.

Although Robinhood has not specified the actions it plans to take, Bloomberg suggests that the company is likely to delist the cryptocurrencies that the SEC has deemed to be unregistered securities.

Earlier this year, Robinhood disclosed that it had received an investigative subpoena in December from the SEC related to the listing of cryptocurrencies.