Robinhood is ending support for cardano (ADA), polygon (MATIC) and solana (SOL) — just days after all three were targeted by the SEC in both of the SEC’s suits against Binance and Coinbase.
The assets won’t be tradable via Robinhood as of June 27, with the brokerage saying that customers with ADA, MATIC and SOL “still on Robinhood after the deadline will be automatically sold and credited” to their Robinhood account.
“Earlier this week the SEC sued crypto companies Binance and Coinbase and alleged that a number of cryptocurrencies are unregistered securities. This includes Solana (SOL), Polygon (MATIC), and Cardano (ADA), which are currently supported on the Robinhood Crypto platform,” Robinhood said in an email to Blockworks.
“This introduced a cloud of uncertainty around these assets and, as a result, our team has decided to end support for them,” Robinhood continued.
The SEC is alleging that ADA, MATIC and SOL are all securities in the lawsuits.
In arguing SOL is a security, the SEC wrote that the “marketed burning of SOL as part of the Solana network’s ‘deflationary mechanism’ has led investors to reasonably view their purchase of SOL as having the potential for profit to the extent there is a built-in mechanism to decrease the supply and therefore increase the price of SOL.”
For MATIC, the SEC claims that Polygon marketed that it burns MATIC tokens accumulated as fees, and also indicated that the supply of MATIC would decrease.
“Any ADA, MATIC, and SOL that’s still on Robinhood after the deadline will be automatically sold and credited to your Robinhood buying power,” Robinhood wrote in a blog post.
“But while paying lip service to its desire to comply with applicable laws, Coinbase has for years made available for trading crypto assets that are investment contracts under the Howey test and well-established principles of the federal securities laws,” the SEC said in its lawsuit against Coinbase.
“Defendants have unlawfully solicited US investors to buy, sell and trade crypto asset securities through unregistered trading platforms,” the SEC wrote in the filing against Binance.
Robinhood did not immediately respond to requests for comment.
Updated June 9, 2023 at 10:18 am ET: Added comments and context throughout.
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Source: https://blockworks.co/news/robinhood-nixes-ada-matic-sol