Robinhood Markets (Nasdaq: HOOD) is cautious after the US securities regulator's lawsuit against Binance and Coinbase, as it is looking into its cryptocurrency offerings, the broker's Chief Legal and Corporate Affairs Officer, Dan Gallagher, confirmed to the US Congress yesterday (Tuesday).
Robinhood Evaluating Its Crypto Offerings
According to a Bloomberg report, the American brokerage is "actively reviewing" the regulator's analysis "to determine what, if any, actions to take."
Robinhood, known for offering commission-free stock trading services, also offers cryptocurrency trading. However, compared to mammoths like Binance, Coinbase, and other crypto exchanges, it only lists about 18 cryptocurrencies, including Solana, Cardano, and Polygon, now deemed unregistered securities.
In its lawsuit against Binance, its US affiliates and Changpeng Zhao, the Securities and Exchange Commission labeled Binance Coin (the exchange native token) and Binance USD (a stablecoin) as unregistered securities. Additionally, it categorized ten other digital currencies as unregistered securities, which Binance is offering.
These cryptocurrencies are Solana's SOL, Cardano's ADA, Polygon's MATIC, Filecoin's FIL, Cosmos' ATOM, Sandbox's SAND, Decentraland's MANA, Algorand's ALGO, Axie Infinity's AXS, and Coti's COTI tokens. As such, the SEC is now categorizing 61 cryptocurrencies in total as unregistered securities.
Delisting Ahead?
Moreover, 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.
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.
BREAKING: Robinhood to delist tokens named in the SEC lawsuit against Binance and Coinbase. This includes Solana, Polygon and Cardano.@xerocooleth@notthreadguy@3orovik@Fityeth@leap_xyz
— Uncle Chad / GIGACHAD2021 (@GIGACHAD2021) June 7, 2023
The California-based broker received an investigative subpoena last December from the US securities regulator with inquiries around cryptocurrency listings. On top of that, the subpoena sought information about the custody of cryptocurrencies and platform operations.
"We received an investigative subpoena from the SEC regarding, among other topics, RHC's cryptocurrency listings, custody of cryptocurrencies, and platform operations," a regulatory filing of the exchange stated.
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This article was written by Arnab Shome at www.financemagnates.com.
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