Robinhood to Delist Three Coins Amid SEC Crackdown
Over the years, the stock trading app Robinhood has gained an increased focus on cryptocurrencies. This includes adding support for new tokens, introducing built-in wallets to the app, and debuting a standalone, non-custodial Web3 wallet among other efforts. However, the company is now taking one slight step back by removing support for three previously-supported assets.
About the delisting:
This morning, Robinhood announced that it would be delisting three coins: Cardano (ADA), Polygon (MATIC), and Solana (SOL). According to the company, support for these three coins will end on June 27th at 6:59 p.m. Eastern. Until that time, customers will still be able to sell, hold, or transfer these coins. However, after the deadline, any assets in a customer’s portfolio will be automatically sold at market value, with the proceeds then being added to their Robinhood balance.
Of the three, the removal of MATIC is the most significant as Robinhood’s own non-custodial wallet (which is a standalone app) utilizes the Polygon network. No announcements regarding possible updates to that service have been announced at this time. However, that app only gives users a place to store their assets and does not support buying them as the core Robinhood service does.
What they’re saying:
In an email to customers, Robinhood pointed to the Security and Exchange Commission’s recent crackdown on certain crypto assets as the reason for the update, noting, “Earlier this week the SEC sued crypto companies Binance and Coinbase and alleged that a number of cryptocurrencies are unregistered securities… This introduced a cloud of uncertainty around these assets and, as a result, our team has decided to end support for them.” Later, in a tweet, the company said, “We believe in the future of crypto and will continue to advocate for regulatory clarity in the U.S. so that customers can participate in the marketplace with greater confidence.”
Looking at the current crypto landscape and what’s happening with the SEC, it’s definitely understandable that Robinhood would seek to distance itself from these three specific assets. The good news is that, now that Robinhood’s allows transfers for crypto, customers will be able to move their coins if they want to hold on to them. Still, this decision is sure to be controversial among fans and detractors alike — and it’s not too hard to draw comparisons to previous questionable Robinhood decisions, such as halting the ability to buy Gamestop stock during the “short squeeze” saga.
Ultimately, it’s hard to say how this move will impact Robinhood in the long run. On the optimistic side, perhaps these current issues with crypto will, as Robinhood suggests, lead to greater regulatory clarity. Until then, however, expect greater fallout to come before things get better.