- The recent legal developments by SEC seem to have had an effect on Bitstamp.
- The crypto firm announced that it was delisting some of its tokens that are classified as a security by the SEC.
- Several other crypto firms have delisted security tokens as a precautionary measure, it is now a wait-and-see situation whether SEC will still go after them.
The regulatory framework in cryptocurrency is taking shape following the outcome of the highly publicised litigations by the U.S. Security Exchange Commission (SEC). Bitstamp has followed joined eToro, and Binance.US in suspending trade for SEC-flagged tokens.
Luxembourg-based cryptocurrency company has decided to halt its trade in the US for seven cryptos classified as securities by the SEC. Bitstamp indicated that its decision to suspend these tokens was influenced by the evolving regulatory landscape in the US
Affected tokens include AXS, CHZ, MANA, MATIC, NEAR, SAND and SOL, which will stop trading from August 29th, 2023. In the legal cases of SEC vs Binance and SEC vs Coinbase, the Security and Exchange Commission was able to get a favourable ruling on the classification of securities and which now must follow the US regulatory framework for financial instruments. Unfortunately for Bitstamp, all the tokens mentioned above have met the threshold for security and could explain why they have been delisted in the US. The sale of financial security in the US brings about heightened regulatory oversight, potential legal liabilities and regulatory complexities
The Announcement
According to the announcement by Bitstamp, starting on August 29, 2023, no new orders will be permitted involving the affected assets, and all current orders across all of these trading pairs will be cancelled. They stressed that investors could still keep these assets in their Bitstamp account and withdraw them whenever they chose to do so.
In the blog post, the crypto firm asked its customers to swiftly execute any intended purchase or sell orders involving the impacted assets by August 29, 2023, in order to guarantee a seamless transition during the trade stop. Following the mentioned date, trading in AXS, CHZ, MANA, MATIC, NEAR, SAND, and SOL on the Bitstamp platform will no longer be possible.
Activities rife in the crypto space following SEC’s litigations
Activities have been rife in the cryptocurrency industry, as firms continue to align their offerings following rulings that have now begun shaping regulatory framework. Bitstamp did not expressly say that their decision is based on the latest ruling in the cryptocurrency space, however, they insinuated so by making mention of words that have now become synonymous with SEC’s legal onslaught against cryptocurrency firms such as “dynamic regulatory environment”, and “recent developments”.
Certain other cryptocurrency platforms have also delisted certain assets. Binance.US stopped a few trade pairings in June, including ATOM/BTC and MANA/BTC. Robinhood also acted in the same way by removing ADA, MATIC, and SOL from its services. At about the same time, eToro blocked access to four cryptocurrencies, including ALGO, MANA, MATIC, and DASH, for US consumers. Revolut, Bakkt have all delisted Cardano (ADA), Polygon (MATIC), and Solana (SOL) in recent months.
The focus on SOL, MATIC AND ADA appears to be so because they are among the largest the SEC targets
So far the crypto firms have taken precautionary measures, it a wait-and-see situation whether SEC will still go after them
