Broker eToro removed ADA, the Cardano Foundation’s cryptocurrency, from its token list, causing its price to fall to a three-month low. The exit of the ADA crypto comes over regulatory concerns the cryptocurrency may have in the eyes of the Securities and Exchange Commission (SEC).
eToro also limited the purchase of the TRON token, TRX, in the face of regulatory uncertainty facing this cryptocurrency along with ADA. eToro also announced that the “staking” of these assets will only be allowed until December 31, 2021.
The platform still allows closing positions in the two cryptocurrencies and selling them in exchange for dollars. The platform also clarified that it will not deliver any more returns for staking and the last distribution will be made on January 15, 2022, which will be made in dollars.
The price of ADA fell by 9% following the confirmation that eToro would stop listing the crypto, while the TRON token fell by 6%, the Solana, Polkadot and Dogecoin tokens fell by 8%, 6% and 5%, respectively.
Despite the fall of ADA, the cardan token has had one of the best performances in the cryptocurrency market this year, appreciating in value by as much as 800% in the last 365 days and reaching a market capitalization of $95 billion at its peak.
At present, uncertainty surrounds not only ADA, but the cryptocurrency market whose protocols are based on the proof of stake system. The proof of stake protocol, unlike the proof of work protocol (the Bitcoin protocol), requires users to constantly staking to approve cryptocurrency transactions.
This activity is under the scrutiny of the SEC, as promising returns on investment is considered to function as a financial asset, so this activity should be regulated under current U.S. Securities regulations.
Cardano is the latest victim of regulatory uncertainty in the U.S.
The news that eToro will remove ADA from its token list took Cardano’s CEO Charles Hoskinson by surprise, as he stated in a video on his Twitter account.
“There’s currently nothing we’ve received, no regulatory event, no subpoena, nothing from any regulatory agency, no threats of lawsuits, none of these things, that’s why we’re so blindsided by it, because actually, the trend has been over the last six months a significant increase of liquidity on cardano,” stated Hoskinson
Hoskinson also noted that Cardano did not receive any notification from eToro about the exit of the ADA token from its platform.
In the United States, there is a heated debate about the future of the regulation of cryptocurrencies and other similar assets. While SEC Chairman Gary Gensler insists that cryptocurrencies should remain under the regulatory wing of the institution he chairs, many crypto experts argue that the SEC does not have adequate tools to regulate the nascent market.
Cryptos are also in the sights of the Federal Reserve (FED), which is studying the possibility of regulating the operation of stablecoins — which are usually low volatility cryptocurrencies — since they are in competition with the dollar itself.