Exchanges are on a delisting spree after the SEC cracked its whip, declaring 13 cryptocurrencies as securities. The latest exchange to join this wave is Bakkt. It has just announced its decision to delist Solana (SOL), Polygon (MATIC), and Cardano (ADA).
All three prominent cryptos were labelled securities by the SEC in its lawsuit against Binance. The move has now forced exchanges operating everywhere to review the assets available on their platform in a bid to maintain compliance. Robinhood reacted by delisting the same assets while eToro US announced that it was delisting Algorand (ALGO), Decentraland (MANA) and Polygon (MATIC).
In a parallel fashion, Bakkt’s general counsel and secretary Marc D’Annunzio confirmed with Fortune that the company was taking “proactive action” until there is more clarity from regulators on how to legally and compliantly offer a wider range of coins.
While the SEC has embarked on a rampage, it has totally ignored the calls for a regulatory framework that will guide companies in the industry. CEO Gavin Michael expressed disappointment in the lack of clarity in regulations. In an interview with Fortune, he said: “It’s fine to tell me where I can’t stand… But you have to tell me how to operate.:
SEC enforcement pushes exchanges to trim cryptos
One of the major impacts of the SEC’s rampage is the reduction in the array of cryptocurrencies tradeable on exchanges. Bakkt’s acquisition of trading infrastructure provider Apex Crypto enabled it to expand its horizon after initially offering only Bitcoin and Ethereum but SEC’s mounting pressure means that it could be back to square one.
In early April, it delisted ALGO and MANA when the SEC named them as securities in the lawsuit against Bittrex. Twenty-five more tokens including Uniswap (UNI) and Avalanche (AVAX) were removed in the following month as regulatory pressure intensified.
In light of the delisting frenzy, CNBC trader and founder of Crypto Banter, Ran Neuner believes that the SEC is deliberately going through this route to financially cripple companies in the space.
“The SEC is playing very smart against Coinbase – they have an unfair advantage. They are pushing Coinbase into huge legal fees and at the same time reducing the tokens they can trade on the platform and choking the on-ramps to hurt Coinbase revenue … At the same time they can see through transparent reports exactly how much money Coinbase has to keep fighting,” he has tweeted.
As the SEC ramps up enforcement actions against altcoins and exchanges facilitating their trading, many are predicting a Bitcoin-centric market in the near future including MicroStrategy CEO Michael Saylor.
He told Bloomberg in an interview: “I think they have a view of cryptocurrency exchanges which is far constrained. I mean their view is crypto exchanges should trade and hold pure digital commodities like Bitcoin and so the entire industry is kind of destined to be rationalised down to a Bitcoin-focused industry with maybe half a dozen to a dozen other proof-of-work tokens.”
This forecast is now gaining credibility as exchanges persist in delisting altcoins at a rapid pace.