Cardano (ADA) plummeted to its lowest price since August last week, after global trading platform eToro announced the delisting of the ADA tokens on the US platform due to regulatory concerns. With this, Cardano becomes the latest victim of unclear regulatory guidelines that have repeatedly shocked the advancing crypto market.
Per the official announcement by eToro, US customers will no longer be able to trade ADA (Cardano) and TRX (TRON) starting December 26th, 2021. Additionally, all US customers holding ADA won’t be eligible for staking rewards from January 1, 2022. eToro is one of the leading platforms for both foreign exchange and cryptocurrency trading. As such, the decision to delist ADA has severely impacted the token’s value, bringing it down by almost 49% from its September all-time high of $3.10.
eToro clarified that this decision is based upon its “business-related considerations in a market where regulatory guidelines are continuously evolving.” However, the platform also noted that all users can still sell off any ADA and TRX that they own.
While this decision has impacted ADA’s price temporarily, ADA is still one of the best-performing cryptocurrencies in 2021, rising as much as 850% this year. Yet, the fact that eToro listed ADA back in 2018 and just delisted it without citing any “serious” reasons after all these years has come as a shock for many users.
Cardano Founder Charles Hoskinson posted a video on Twitter saying that he was surprised by this decision and would appreciate additional clarifications. The regulatory policy for cryptocurrencies in the US isn’t clear yet. Besides, Cardano hasn’t yet been involved in any regulatory troubles, not to mention its partnership with blockchain analytics provider Confirm earlier this year to comply with regulatory frameworks, such as AML and KYC directives.
Unclear Regulatory Policies Take A Toll On US Crypto Ecosystem
Increased regulation has become an ongoing concern for almost all cryptocurrencies. The first wave of regulatory crackdowns began in 2017, which sparked more than 80% correction and an entire year of bearish movement in the crypto market. Similar crackdowns have continuously rattled the crypto ecosystem in recent years, creating a complicated and confusing market behavior that severely curtails the growth of cryptocurrencies.
Understandably, the explosive growth of cryptocurrencies took most governments and regulatory bodies by surprise, but implementing traditional financial guidelines on emerging digital assets doesn’t seem to be a well-thought decision. As such, a lingering threat of finding themselves on the wrong side of regulatory policies, be it due to their own fault or without any valid reason, continues to haunt the entire crypto ecosystem.
Regulatory bodies like the SEC have proposed several new suggestions to regulate the growing number of crypto assets. On the one hand, regulation is necessary to ensure that investors’ interests are protected and that illicit activities like money laundering can be prevented. However, hastily-implemented decisions are of no help. Blockchain companies often find themselves under intense pressure from regulators when it comes to pulling the plug on certain services or delisting coins without much substantial reason for doing so.
The good news is that President Joe Biden’s economic advisors have drafted a bill urging Congress to implement regulatory oversight and a formal market structure for cryptocurrencies as soon as possible. The SEC is likewise beginning to warm up to the idea of cryptocurrencies and has said that it has no plans to introduce a blanket ban similar to the one enacted by China.
But for now, eToro’s decision to delist ADA only amplifies the confusion regarding regulatory guidelines in the US. There is no denying that increased regulations are just around the corner and that the SEC has clear plans to pursue “unregistered service providers” in the crypto space. The problem is that no one knows when that will happen, which cryptocurrencies will be the next victims, or how it will impact the nascent crypto market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.