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BitStamp Bows to SEC Pressure Despite XRP Win — Halts MATIC, NEAR, SOL & More

Last Updated August 10, 2023 10:26 AM
Omar Elorfaly
Last Updated August 10, 2023 10:26 AM

Key Takeaways

  • BitStamp announced the removal of several altcoins from the platform
  • Altcoins such as MATIC, SOL, and NEAR face a trading crisis in the US
  • Exchanges comply with SEC rules despite XRP’s win

BitStamp,  the world’s longest-running cryptocurrency exchange, announced  halting the trade of several altcoins on the platform. Following the footsteps of Revolut, BitStamp will stop allowing customers to trade in tokens such as ADA, SOL, and NEAR.

The company cites its main reason being the current crypto regulatory environment for its decision.

Although the regulating body, the US Securities and Exchange Commission, has yet to provide a solid argument why such altcoins are considered securities, many exchanges are complying with its rules to avoid lawsuits such as the ones filed against Coinbase and Binance.

Mass Altcoin Banishment

“At Bitstamp, we have a comprehensive framework in place to continuously evaluate the cryptocurrencies we provide, taking into account the dynamic regulatory environment. Considering recent developments, we are making some changes to our crypto offerings—specifically for our customers residing in the United States,” read the company’s announcement  on Tuesday, August 8.

“Starting from August 29, 2023, we are suspending trading for the following cryptocurrencies in the US: AXS, CHZ, MANA, MATIC, NEAR, SAND and SOL.”

Starting the 29th of this month, the company will no longer allow users residing in the United States to trade the tokens mentioned above. BitStamp will also halt all trade pairs involving these tokens. However, users’ tokens will be saved on the platform, and they may choose to keep them or withdraw them at any time. 

“To ensure a smooth transition during the trade halt, we kindly request our users to promptly execute any desired buy or sell orders involving the affected assets before August 29, 2023. After this deadline, trading activities related to AXS, CHZ, MANA, MATIC, NEAR, SAND, and SOL will be permanently disabled on the Bitstamp platform.”

Why Are Exchanges Removing Altcoins?

The SEC, the regulating body regarding the trade of digital assets in the US, refuses to support the legitimacy of any cryptocurrency besides Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. To enforce its stance, the SEC labels any altcoins as securities, till proven otherwise. 

The regulating body weaponizes that ‘securities’ status to stop any exchange from allowing the trade of such tokens. A prime example of the process can be seen in the SEC’s lawsuits against Coinbase and Binance. 

However, one company managed to refute the SEC’s claims. Ripple achieved a landmark legal victory against the regulating body when US District Judge Analisa Torres ruled that the company’s native token, XRP is not a security. 

The company’s triumph brought a wave of optimism to the crypto industry as several companies see Ripple’s win as an indication of a potential win in their own SEC litigation.

However, on Wednesday, August 9, the SEC announced  that it will be filing an appeal against Judge Torres’ decision, fortifying its stance on XRP.

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