Robinhood Delists Solana (SOL), Cardano (ADA), and Polygon (MATIC) as SEC Labeled Securities

In a surprising move, Robinhood, a US-based trading firm famous for its foray into cryptocurrencies, recently announced the delisting of three leading tokens: Solana (SOL), Cardano (ADA), and Polygon (MATIC). The decision was taken shortly after the Securities and Exchange Commission (SEC) filed lawsuits against two major players in the crypto industry, labeling these tokens as securities. Citing SEC claims as the primary reason for the write-off, Robinhood expressed concern over the uncertainty surrounding these assets and their impact on their users. This article provides a thorough overview of the takedown, the implications for Robinhood users, and the feedback from the individual project teams.

Robinhood Removal and User Impact:

Robinhood has set June 27, 2023, at 6:59 p.m. ET as the SOL, ADA, and MATIC deadline to end support. The remaining tokens held in the user’s Robinhood Crypto account after this deadline will be sold at their market value. Proceeds from the sale will be credited to the purchasing power of Robinhood users. Importantly, Robinhood clarified that no other coins will be affected by this removal, ensuring users can continue buying, selling, and holding other cryptocurrencies without interruption.

Statement from Robinhood:

In its official statement, Robinhood emphasized that users can continue to interact with ADA, MATIC, and SOL until the deadline. Additionally, they highlight that users will still be able to transfer these tokens until June 27, 2023. It should be noted that residents of Hawaii, Nevada, and New York have specific restrictions on purchasing and transferring ADA, MATIC, and SOL, as per local regulations.

Response from the Project Team:

The development team behind Polygon, Solana, and Cardano have been debating the SEC’s classification of their tokens as securities. They categorically reject the claims made by regulatory authorities. This suggests that Robinhood’s delisting decision may have been influenced by ongoing SEC scrutiny, particularly regarding the activities of leading exchanges such as Binance and Coinbase.

Robinhood Legal Challenge:

Robinhood’s Chief Legal Officer, Dan Gallagher, revealed that the company has been actively reviewing the token following the SEC’s analysis. During his testimony before the House Agriculture Committee, Gallagher, a former SEC Commissioner, stated that Robinhood had followed a 16-month registration process with the agency to operate as a special purpose broker for digital assets. However, SEC staff notified Robinhood in March that their efforts were in vain and would not produce the desired results.

Coinbase Similar Experience:

Coinbase’s Chief Legal Officer, Paul Grewal, shared similar sentiments, accusing the SEC of rejecting attempts to register the platform without providing any response or alternative proposals. These parallels underscore the challenges companies face in complying with regulatory requirements and engaging in the cryptocurrency market.

Robinhood’s decision to delist Solana (SOL), Cardano (ADA), and Polygon (MATIC) in response to the SEC’s labeling of these tokens as securities has raised eyebrows in the crypto community. As the deadline approaches, users of the Robinhood platform are advised to take the necessary actions with their SOL, ADA and MATIC holdings. While the project behind this token is challenging SEC classification, the delisting serves as a reminder of the evolving regulatory landscape in the crypto industry and the challenges companies have to face.