The lawsuits against Binance and Coinbase have started a chain reaction and Robinhood seems to have got affected by it.
The SEC’s stern actions against the leading crypto exchanges have triggered a ripple effect in the fledgling industry. The major commission-free trading platform Robinhood is the first one to confirm this. Its chief legal officer Dan Gallagher has said that the platform is reconsidering support for multiple cryptocurrencies.
Litigations that are causing unease among others
In a quick series of events, the regulatory body filed two separate lawsuits against Binance as well as the Nasdaq-listed exchange Coinbase. The litigations involve some serious allegations made against the two major platforms in the sphere. The one against Binance says that the platform runs the sale of unregistered securities while being associated with unenrolled clearing agencies, broker-dealers, and exchanges.
For Coinbase, it’s running the platform without being a registered entity to buy and sell any sort of asset or commodity. Moreover, the SEC has labeled a few cryptocurrencies as securities and sought appropriate on them. This list names over 60 digital assets that include Solano’s SOL, Cardano’s $ADA, $NEXO, Axie Infinity’s $AXS, and Cosmos ($ATOM).
Notably, Gallagher served as an SEC commissioner in the past and is probably acting on the basis of his experience with the regulatory. According to a Bloomberg report, he attended the meeting of the House Agriculture Committee to discuss the future of digital assets too.
In terms of operational scale, Robinhood has kept a low profile. It offers a limited range of 18 digital tokens as compared to Binance’s and Coinbase’s huge base that included hundreds of them.
What’s making SEC so stern?
Talking about the current stance of the SEC towards crypto, some interpretations could be made by judging its chairperson’s viewpoint. In a live TV interview, Gary Gensler ruled out the need for additional digital currencies. According to him, they already exist in the form of the US dollar, the Euro, and the Yen,
He also said that the lawsuits against the crypto exchanges were pending for a very long time. Due to the probing process, they took a long time to get materialized. He said that the regulation has been in talks with the exchanges to make them compliant with the rules.
It should be noted that Coinbased has sued the SEC for not framing any laws for cryptocurrency. However, the regulatory has tried to dismiss the litigation citing that this kind of work could take years.
Conclusion
After the SEC crackdown on Binance and Coinbase, many other exchanges have got cautious about their operations. Robinhood is seemingly acting on it and gearing up for the future. Going by the current hostile attitude, it’s easy to say what the forthcoming days have for the crypto exchanges. We can only guess that the regulatory will soften its stand and will consider more possibilities for digital assets.
