Digital currency trading platform, Bakkt Inc, has decided to delist Cardano (ADA), Solana (SOL), and Polygon (MATIC) following their designation as investment contracts by the United States Securities and Exchange Commission (SEC). This move is in response to the regulatory uncertainty surrounding these digital currencies and aims to ensure compliance with the SEC’s guidelines.
Bakkt’s General Counsel, Marc D’Annunzio, stated that the delisting would remain in place “until there is further clarity on how to compliantly offer a more extensive list of coins.” Known for supporting a streamlined list of digital currencies, Bakkt had previously delisted Algorand (ALGO) and Decentraland (MANA) after the SEC filed a lawsuit against Bittrex. As it stands, Bakkt supports the trading of Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC), USDC, and Shiba Inu (SHIB) among others.
The growing trend of delisting digital currencies designated as investment contracts by the SEC is causing concern among industry experts who fear that it could shrink the liquidity of the affected tokens. Robinhood was the first trading platform to announce its decision to delist the three digital currencies, though it gave users until the 27th of the month to trade the tokens. Meanwhile, eToro followed suit, declaring that its US customers would no longer have access to the three digital currencies until there is regulatory clarity around them.
This recent delisting wave recalls the troubles that XRP encountered when the SEC labeled it a security, charging Ripple Labs Inc in a $1.3 billion lawsuit back in December 2020. As the delisting trend expands, industry analysts are intently watching to see which platforms will be next to join the movement.
On one hand, the delisting of digital currencies is a sign of platforms and exchanges prioritizing compliance with securities regulations and staying on the right side of the law. By removing assets that are subject to regulatory scrutiny, the platforms reduce their risk of facing legal action or regulatory penalties, which could ultimately damage their reputation and bottom line.
On the other hand, these delistings could negatively impact the growth potential of the affected digital currencies and the broader crypto industry. With reduced liquidity and trading volume, the exclusion of such assets from popular platforms could hinder mainstream adoption and limit the development of new blockchain projects and innovations. Investors may find it harder to access and trade these digital currencies, potentially causing substantial losses.
In conclusion, the delisting of Cardano, Solana, and Polygon by Bakkt and other platforms highlights the ongoing tension between regulatory compliance and the need for innovation in the fast-growing crypto industry. While it is critical for platforms to adhere to regulations, it is equally essential for the broader market to promote a diverse and dynamic environment where blockchain technology can continue to evolve and thrive.
Source: Coingape
