In recent weeks, the Securities and Exchange Commission (SEC) alleged that several tokens, including Cardano (ADA), Polygon (MATIC), and Solana (SOL), are being sold on cryptocurrency exchanges which aren’t authorized to do so. However, the organizations that support these cryptocurrencies have rejected the SEC’s claims. These tokens were cited as examples of securities being issued and traded on Binance and Coinbase without adhering to the requirements in the SEC’s actions against these companies.
In a turn of events, the well-known trading site Robinhood stopped supporting ADA, MATIC, and SOL from June 27th, 2023, at 6:59 PM ET, according to a statement. On June 26th, 2023, at 6:59 PM ET, transfer support for these coins ended. The notice makes it clear that none of the other coins on Robinhood are impacted, and the platform’s security remains intact for consumers’ remaining crypto assets.
After the deadline, any ADA, MATIC, or SOL that customers still held in their Robinhood Crypto accounts were sold at market price, with the revenues being added to the users’ Robinhood buying power. At the same time, the trading platform let go of around 150 of its employees or around 7% of the workforce, which comes as customer satisfaction and user activity plummeted.
To no surprise, immediately after Robinhood’s announcement, the altcoin market was in sharp decline. There is good news here, too, though. Most customers would have been aware of the move and moved their coins to other exchanges. However, trouble does not stop here as defunct crypto platform Celsius announced it would sell all altcoins, including ADA, SOL, and MATIC, on July 1.
This decision enables Celsius to concentrate on the two most well-known and valuable cryptocurrencies, streamlining operations and possibly lowering costs related to handling a wide variety of altcoins. In the cryptocurrency market, Bitcoin and Ethereum are more frequently used and liquid, making it simpler to acquire and sell them when necessary.
A Celsius consumer lawyer, David Adler, has opposed the company’s restructuring strategy. He contends that the proposed scheme breaks state and federal consumer lending laws. Adler complains directly about how Celsius handles Retail Borrow Claims, claiming that Celsius requires loan repayments without intending to uphold its end of the bargain by returning collateral to borrowers. According to Adler, this is against consumer lending regulations.
Regardless of whether the conversion occurs all at once or gradually over time, there is a chance that selling pressure on the affected altcoins may rise. It’s also possible that the market has already foreseen the potential effects and has already factored in the upcoming selling pressure into the prices of ADA, SOL, and MATIC.
The deadlines set by Robinhood and Celsius may signal a turning point in the altcoin market, in which a trend reversal happens after the announcement. Ultimately, it’s still unclear how the market will respond to these developments.