Robinhood To Review Its Crypto Listing Amid SEC's Crackdown On Exchanges

Robinhood To Review Its Crypto Listing Amid SEC’s Crackdown On Exchanges

Updated: 09 June 2023

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Robinhood is actively reconsidering its cryptocurrency offerings in response to the recent regulatory crackdown by the US Securities and Exchange Commission (SEC) on significant crypto exchanges.

As the crypto regulatory atmosphere in the US grows increasingly cloudy, prominent stock exchanges and brokerage firms like Robinhood are beginning to rethink their cryptocurrency offerings. This comes as the SEC has embarked on crackdown actions against two top cryptocurrency exchanges, Binance and Coinbase. The agency has itemized several digital assets on the platforms as unregistered securities.

Robinhood Legal Chief Testifies At Congress Hearing On Crypto Regulation

On June 6, the House Committee of Agriculture convened a hearing tagged “The Future of Digital Assets: Providing Clarity for Digital Assets Spot Markets.” Further, Robinhood Markets’ chief legal officer, Dan Gallagher, told U.S. Congress on June 6 that the financial services company is “actively reviewing the regulator’s analysis to determine what, if any, actions to take,” as quoted by Bloomberg.

The former SEC commissioner, Gallagher announced the move when he testified in Congress before the House Agriculture Committee. Robinhood’s app notably facilitates trades of cryptocurrencies alongside stocks and exchange-traded funds.

However, Robinhood users can choose between 18 different coins as the brokerage provides relatively limited access to crypto assets compared to the hundreds of digital currencies listed by the exchanges. The SEC considers some unregistered securities, such as Solana, Cardano, and Polygon.

In its lawsuit against Binance, its US affiliates, and Changpeng Zhao, the Securities and Exchange Commission labeled Binance Coin and Binance USD (a stablecoin) unregistered securities. Nonetheless, the agency categorized ten other digital currencies as unregistered securities, which the giant exchange Binance is offering.

These cryptocurrencies are Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), and Coti (COTI) tokens. As such, the SEC is now categorizing 61 cryptocurrencies in total as unregistered securities.

Delisting Ahead?

Significantly, the SEC is engaged in a lengthy legal battle with the blockchain company, Ripple, to decide the status of XRP, which the regulator alleged to be regarded as unregistered securities. At the time of that lawsuit, several US-focused crypto trading platforms delisted XRP.

Last December, the California-based broker received an investigative subpoena from the U.S. SEC with inquiries about cryptocurrency listings. Further, the subpoena sought information about the custody of cryptocurrencies and platform operations.

Although Robinhood did not specify if it will take any action, it will most likely delist the cryptocurrencies the SEC categorized as unregistered securities to avoid negative regulatory pressure.

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