American financial service provider Robinhood is deciding whether or not to maintain the listing of Solana’s native cryptocurrency SOL and some other crypto assets that were categorized as securities in the Securities and Exchange Commission (SEC) lawsuit against Binance.
Several cryptocurrency exchanges have started feeling jittery following the series of lawsuits that the SEC has levied against top crypto firms for violation of federal securities laws.
Dan Gallagher, the Chief Legal Compliance Office at Robinhood and a former SEC commissioner told the House Agriculture Committee on Tuesday that they “are actively reviewing the SEC analysis to determine what, if any, actions to take in that regard.”
Robinhood Wields Broker-Dealer License
Although Robinhood has a broker-dealer license for the trading of securities, Gallagher is not certain if the company can use that same license to trade the tokens listed by SEC as securities. Also, he stated that a lack of disclosure standards for other security investments from those projects will likely affect relisting these tokens.
In response to a question concerning how retail investors could understand what they are buying when it comes to cryptocurrencies, the Robinhood executive explained that compulsory disclosure in the crypto industry is missing.
However, together with former Commodity Futures Trading Commission Chair Christopher Giancarlo and Paul Grewal, the Chief Legal Officer at Coinbase, he is making efforts to define what potential investors should be exposed to.
SEC Sues Binance For Listing Securities
The regulator sued the largest and most popular cryptocurrency exchange Binance on Monday for violating securities laws, flouting KYC rules, mishandling investor funds and misleading investors and regulators.
The lawsuit also stated that several altcoins within and outside the Binance ecosystem including BNB, BUSD, Cardano’s ADA, and Polygon’s MATIC token are considered to be securities. Other mentioned tokens are Solana (SOL), Cosmos (ATOM), Decentraland (MANA), Axie Infinity (AXS), COTI, The Sandbox (SAND), Filecoin (FIL), and Algorand (ALGO).
Coinbase Violates Federal Securities Laws
American crypto exchange Coinbase which recently became a custodian for Bitpanda faced the same charge from the SEC one day after Binance.
According to the regulator, Coinbase was operating as an unregistered national securities exchange and broker. In this case, tokens like SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO were all tagged to be securities.