Robinhood Markets Inc. announced a significant decline in crypto trading, reporting a staggering 68% drop compared to the previous year. In May 2023, the total crypto trading volume on Robinhood was approximately $2.1 billion, a notable decrease from the $6.6 billion recorded just a year prior, according to the brokerage firm’s monthly operating data report.
Furthermore, when comparing May 2023 to April 2023, there was a substantial month-to-month decline of 43% in crypto trading, as indicated by Robinhood’s data.
This decline in crypto trading activity follows Robinhood’s decision to delist certain cryptocurrencies, namely Cardano, Polygon, and Solana. The delisting was a response to the US Securities and Exchange Commission’s declaration that these three cryptocurrencies were considered securities, which emerged from the SEC’s charges against two major crypto exchanges the previous week.
Specifically, the SEC filed lawsuits against Binance, the largest global crypto exchange, and Coinbase, the largest US-based crypto exchange, on June 5 and 6, respectively. In response, Robinhood announced that it would cease support for Cardano (ADA), Polygon (MATIC), and Solana (SOL) on June 27. However, investors are still able to buy, sell, and hold these cryptocurrencies until the deadline.
Robinhood clarified that this change would not impact any other cryptocurrencies held on its platform, as stated in a press release issued on Friday. As a consequence of these developments, the value of Solana dropped to approximately $15 from $22.23 on June 4, according to data from CoinMarketCap. Similarly, Polygon and Cardano experienced similar declines in value.
Robinhood delist crypto – SEC Pushes Back on Exchange Registration Process
SEC Chair Gary Gensler has consistently emphasized the importance of crypto firms registering with the agency. Gensler highlighted that the crypto industry operates on a business model that often disregards compliance, expressing this view during an appearance on CNBC Squawk Box last week.
Gensler revealed that the SEC has engaged in discussions with numerous crypto firms, numbering in the dozens. While these conversations have been productive, Gensler emphasized the need for these firms to align their business models with regulatory compliance.
In contrast, Coinbase, a prominent cryptocurrency exchange, stated that it was met with dismissal from the SEC despite months of efforts to navigate the registration process. Coinbase’s Chief Legal Officer, Paul Grewal, conveyed this message during a House Agriculture committee hearing, noting that the SEC provided no response, counterproposal, or constructive ideas in return.
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