eToro the Latest to End Access to ALGO, MATIC, MANA and More. Is This the End of Altcoins?
Is it over with altcoins? | Credit: Shutterstock
- In reaction to recent SEC legal actions, eToro will delist a number of crypto tokens for U.S. users
- Beginning on July 12, U.S. clients won’t be able to buy ALGO, MANA, DASH, and MATIC
- Users can continue to hold and sell their current positions in these tokens
- Rise in regulatory settlements by crypto firms shows SEC’s message is beginning to take hold
Just a week after Robinhood made a similar announcement , eToro said it would delist a number of altcoins “due to recent developments” in the market, referring to the SEC’s cases against Binance and Coinbase.
After July 12, US users of eToro won’t be able to purchase Polygon (MATIC), Algorand (ALGO), Decentraland (MANA), and Dash (DASH).
eToro US Delists Altcoins After SEC’s Latest Attack on Crypto
According to the announcement, eToro users will still be able to hold and sell their holdings in these altcoins despite the delisting preventing them from creating new positions. The four impacted coins will still be available for trade in other markets since, as eToro emphasized, the change will only affect US consumers.
Relating the delisting to “recent developments,” eToro made reference to the SEC’s simultaneous litigation against Binance and Coinbase, the biggest two cryptocurrency exchanges in the world. Following its legal action, the securities regulator expanded the number of new tokens it included on its list of cryptocurrencies it regards as “securities.”
Numerous significant altcoins, like Solana (SOL), Cardano (ADA), Binance Coin (BNB), Cosmos (ATOM), and Polygon (MATIC), have been given this distinction. In response to regulatory pressure, stock firm Robinhood also declared it will delist SOL, ADA, and MATIC.
It’s crucial to remember, though, that eToro and Robinhood decided to delist the aforementioned altcoins on their own volition rather than because the SEC ordered them to. While everything is going on, the commission keeps up the intense pressure on cryptocurrency exchanges, criticizing them for, among other things, listing unregistered “crypto asset securities.”
The simultaneous listing of these assets on stock brokerages raises concerns about the SEC’s enforcement of securities laws and its uniformity in doing so across various trading platforms. ADA , SOL , and MATIC all decreased over the last seven days by more than 18%, 19%, and 17%, respectively.
Previous Steps Taken by eToro to Address Regulatory Challenges
It’s not the first time that eToro has modified its offers in response to regulatory difficulties. After the SEC sued Ripple Labs, eToro delisted Ripple’s XRP in December 2020. Concerns over the token’s legal standing, as established by the SEC, led to the decision to cease XRP trading.
It’s important to note that the decision by eToro to stop accepting orders for ALGO, MANA, MATIC, and DASH should not be seen as a long-term suspension of support for these altcoins. The platform intends to resume full support for these assets once regulatory difficulties are resolved because it is still committed to the cryptocurrency industry.
With the SEC’s new enforcement strategy toward cryptocurrencies, other businesses may follow in the footsteps of eToro and Robinhood in order to avoid regulatory difficulties that could further negatively impact users living in the U.S.
Is This the End For Altcoins?
Following a week in which the U.S. Securities and Exchange Commission’s crackdown on the industry gathered substantial momentum, a steep crypto selloff over the weekend driven by a decline in smaller digital currencies sparked a new wave of investor fear.
While tokens like Solana’s SOL, Polygon’s MATIC, and Avalanche’s AVAX are still looking at double-digit percentage decreases, altcoins like Cardano’s ADA started to recuperate and was rising by 0.5% at the time of writing.
Concerns about alternative stablecoins and their regulation have increased in the wake of the Terra (UST) algorithmic stablecoin’s May 2022 crash. Supporters of Tether (USDT), the biggest stablecoin, were accused of misrepresenting its reserves and were fined $41 million by the Commodity Futures Trading Commission and in 2021, they settled with the New York Attorney General for $18.5 million.
Limited information regarding Tether’s reserve holdings is being published daily.
“What backs these tokens so we can make sure that these holdings can actually be converted to dollars one-to-one?” asked in April 2022 , SEC’s Chair Gary Gensler adding that stablecoins may facilitate money laundering and sanction evasion while also posing systemic dangers to the cryptocurrency ecosystem and beyond.
The SEC is likely to see the majority of stablecoin trades as securities transactions since it views cryptocurrency exchanges as de facto securities brokers. Even though it hasn’t yet filed a lawsuit, the SEC has hinted that it might be one of the federal entities looking into Tether.
Conclusion
The SEC has made a point of stressing its desire to collaborate with cooperative industry players in recent crypto settlement announcements. Gensler has stated that the objective is to extend to cryptocurrency the investor safeguards that have contributed to the success of American securities markets. The rise in regulatory settlements by crypto firms indicates that the message is beginning to take hold for now.
