Bakkt, the New York-based digital assets platform, has decided to delist three major cryptocurrencies: Solana (SOL), Polygon (MATIC), and Cardano (ADA). The move comes as Bakkt seeks more clarity regarding regulatory compliance for offering a broader range of coins.
The decision follows recent lawsuits filed by the Securities and Exchange Commission (SEC) against Binance and Coinbase, accusing both exchanges of offering unregistered securities to customers.
The SEC’s expanded definition of securities has prompted crypto platforms like Robinhood and now Bakkt to reevaluate their token listings.
Bakkt, which provides turnkey services to fintech platforms, including Webull and Public.com, initially offered only Bitcoin and Ethereum. However, its acquisition of Apex Crypto in April allowed for the expansion of available cryptocurrencies.
Before the acquisition, the exchange already delisted seven tokens from Apex Crypto during the due diligence process, including Terra and ZCash.
In May, they delisted an additional 25 tokens, leaving them with a curated selection of eight cryptocurrencies, such as Dogecoin, Litecoin, USDC, and Shiba Inu, alongside Bitcoin and Ether.
The decision to delist Solana, Polygon, and Cardano reflects the challenges faced by crypto platforms in the United States amidst an increasingly stringent regulatory environment shaped by the SEC.
Bakkt’s Criteria for Token Listing
Bakkt’s CEO, Gavin Michael, emphasized the need for clear operational guidelines in addition to limitations.
Michael said:
It’s fine to tell me where I can’t stand. But you have to tell me how to operate.”
Bakkt’s Chief Product Officer, Dan O’Prey, revealed that a committee assesses various factors, including token characteristics, liquidity, trading volumes, and the likelihood of SEC classification as a security.
The exchange applies legal standards like the Howey Test and considers tokens previously deemed securities.
Delisting tokens before the SEC designates them as securities have become a proactive strategy adopted by Bakkt. Liquidity providers withdrawing support for tokens like Decentraland (MANA) and Algorand (ALGO) following the Bittrex lawsuit was a factor in their delisting.
Bakkt’s decision to delist 25 tokens in May proved wise, as one of them, Filecoin, was later included in the SEC’s lawsuit against Binance.
However, Bakkt remains committed to working with regulators to ensure compliance, despite anticipating further challenges. The company plans to expand its custody offerings beyond Bitcoin and Ether to include other cryptocurrencies.
Its proactive approach aims to navigate the evolving regulatory landscape while continuing to offer a reliable and compliant crypto trading experience.
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