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(Kitco News) - Robinhood, the popular fintech trading app in the U.S., has announced that it will be ending support for three popular cryptocurrencies as a result of them being identified as securities in the recently filed lawsuits by the Securities and Exchange Commission (SEC) against the Coinbase and Binance crypto exchanges.
“We regularly review the crypto we offer on Robinhood,” the exchange wrote in a blog post. “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.”
The delisting of these tokens wasn’t entirely unexpected as Dan Gallagher, Chief Legal Compliance Officer at Robinhood and a former SEC commissioner, told the House Agriculture Committee in testimony on Tuesday that the firm was “actively reviewing the SEC analysis to determine what, if any, actions to take in that regard.”
Unlike the firms that have been targeted by the SEC, Robinhood has been granted a broker-dealer license for the trading of securities, but Gallagher said that he still didn’t think the company could trade tokens named as unregistered securities by the SEC in the recent enforcement actions.
He also noted that the lack of standard disclosures that often come with other security investments would hinder the re-listing of the tokens being removed at a later date, and said that “Compulsory disclosure in the digital asset space is missing,” when asked how a retail investor could understand what they’re buying when investing in crypto.
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As for the immediate future, Robinhood users can continue to buy, sell and hold ADA, MATIC and SOL up until the June 27 deadline. They can also transfer these assets to a separate wallet that they control up to this date. Limitations apply to residents of Hawaii, Nevada and New York.
Once the deadline has passed, any ADA, MATIC or SOL that remains in a user's Robinhood Crypto account will be sold for market value and the proceeds will be credited to their Robinhood account.
Robinhood said that users can still trade the other cryptocurrencies available on the platform, depending on the state that they live in, and reiterated that all digital assets on the platform are safe.
“We protect all the coins owned by our customers with industry-leading security,” Robinhood said. “Nearly all of your crypto is held in cold storage, and we never lend your coins or leverage against them.”
