The fallout from the Securities and Exchange Commission’s sweeping lawsuits against Binance and Coinbase continued to ripple through the crypto industry on June 13, 2023, as trading platform eToro announced it would delist four tokens labeled as securities by the regulator. The move underscores a rapidly shifting landscape in which exchanges and brokerages are racing to distance themselves from tokens in the SEC’s crosshairs.
TL;DR
- eToro will remove Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC) for U.S. customers effective July 12
- The decision follows the SEC’s lawsuits against Binance and Coinbase, which collectively named 19 cryptocurrencies as unregistered securities
- Robinhood previously delisted Solana, Cardano, and Polygon in response to the same regulatory pressure
- Bitcoin dominance surged past 50% for the first time in two years as capital rotated away from altcoins
- A resurfaced 2018 video shows SEC Chair Gary Gensler stating that Bitcoin, Ether, Litecoin, and Bitcoin Cash are not securities
eToro Narrows Its U.S. Crypto Offerings
Israel-based multi-asset investment platform eToro confirmed via a Twitter thread on June 13 that U.S. customers would no longer be able to purchase Algorand, Decentraland, Dash, and Polygon starting July 12, 2023. Existing holders will retain the ability to hold and sell these tokens, but no new purchases will be permitted through the platform.
“We remain a supporter of cryptoassets and believe in the importance of offering our users access to a diversified range of asset classes, which includes stocks, ETFs, and options,” the company stated in its announcement.
The four tokens targeted by eToro’s delisting were among 19 cryptocurrencies that the SEC classified as unregistered securities in its twin lawsuits filed the previous week against Binance and Coinbase. The regulatory actions sent shockwaves through digital asset markets, prompting multiple platforms to reassess their token listings.
Robinhood Led the Delisting Wave
eToro’s decision follows a similar move by U.S.-based trading platform Robinhood, which announced on June 9 that it would remove Solana (SOL), Cardano (ADA), and Polygon (MATIC) from its platform by the end of June. Robinhood warned users that any remaining tokens in their wallets after the cutoff would be automatically sold at market value.
The pattern of delistings highlights the practical impact of the SEC’s enforcement strategy: even before the Binance and Coinbase cases are resolved in court, the mere allegation that certain tokens are securities is enough to force their removal from major trading platforms.
Gensler’s Past Statements Resurface
Adding fuel to the regulatory fire, a 2018 video surfaced on June 12 in which current SEC Chairman Gary Gensler—then a professor at MIT—told a group of institutional investors that Bitcoin, Ether, Litecoin, and Bitcoin Cash were not securities. The comments appear to contrast with his current regulatory posture, under which the SEC has taken the position that virtually all cryptocurrencies except Bitcoin qualify as securities.
Notably, Ether was spared from the SEC’s classification as a security in both the Binance and Coinbase lawsuits, providing some relief to Ethereum supporters. The ambiguity surrounding which tokens qualify as securities remains a central tension point between the crypto industry and regulators.
Bitcoin Dominance Surges Amid Altcoin Selloff
As altcoins bore the brunt of regulatory fears, Bitcoin solidified its position as the market’s safe haven. BTC’s market dominance climbed above 50% for the first time in two years, with the leading cryptocurrency trading around $25,900 on June 13. The total crypto market capitalization stood at approximately $1.06 trillion.
MicroStrategy’s Michael Saylor captured the sentiment in a June 13 tweet: “The entire industry is destined to be rationalized around Bitcoin.” For Saylor and other Bitcoin maximalists, the SEC’s crackdown on altcoins validates the thesis that Bitcoin stands alone as a commodity rather than a security.
Binance US Shifts to Crypto-Only Model
Meanwhile, Binance’s U.S. affiliate completed its transition away from dollar-based operations on June 13, having suspended USD deposit and withdrawal channels. The move to a crypto-only model came as customers were given a deadline to withdraw fiat balances via bank transfer, further signaling the operational toll of the SEC’s enforcement actions.
Why This Matters
The cascading delistings triggered by the SEC’s legal actions represent a pivotal moment for cryptocurrency markets. Platforms are making concrete business decisions—removing tokens, suspending services, pivoting strategies—based on allegations that have yet to be proven in court. For investors, this means reduced access to a growing list of digital assets on regulated platforms. For the industry, it signals that the SEC’s enforcement-first approach is having its intended effect even before any final judgments. The concentration of capital into Bitcoin amid the altcoin selloff may mark the beginning of a more bifurcated market, where tokens perceived as regulatory safe enjoy a premium while those in the SEC’s sights face existential questions about their U.S. market viability.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
held ALGO since 2021 and now I cant even buy it on eToro. every exchange that delists makes it harder to exit the bag
the Gensler 2018 video resurfacing where he says BTC ETH LTC and BCH are not securities is wild. so which is it Gary
^ that video is exhibit A for why nobody trusts the SEC. they change their definition of security depending on who they want to sue