Crypto market watchers’ jaws dropped after Israel-based online trading platform eToro announced on Nov. 23 it intends to delist cryptocurrencies Cardano (ADA) and Tron (TRX) for U.S. users following a regulatory clampdown by market authorities. The announcement sent ADA and TRX prices lower.
Stateside users will not be able to open new ADA or TRX positions, and by Dec. 31, 2021, staking for the assets will no longer be available, eToro said, citing “business-related considerations in the evolving regulatory environment.”
Staking reward payouts for U.S. users will end after Jan. 15, 2022, with the final rewards paid in dollars.
Cardano is an open-source, decentralized crypto with consensus achieved using proof of stake. It facilitates peer-to-peer transactions with its internal cryptocurrency, ADA. Cardano was founded in 2015 by Ethereum co-founder Charles Hoskinson.
Tron is a decentralized blockchain platform supporting smart contracts that hopes to be an operating system which will allow developers to deploy their own decentralized applications.
“The regulatory landscape for crypto is evolving rapidly. As a result, we will be limiting the ability for U.S. users to open new positions in, or earn staking rewards for, ADA and TRX,” eToro spokesperson said in a statement posted on the platform’s website.
U.S. users will still be able to “securely hold existing positions” for the two cryptocurrencies, as the limitations only apply to new positions, according to eToro’s announcement.
eToro said it will limit the selling of holdings in Q1 of 2022.
Cardano founder Charles Hoskinson wrote on Twitter that eToro’s decision was due to a “systemic lack of clarity” in global crypto regulations.
Hoskinson commented on the development in a YouTube video, saying the limitations do not in any way affect ADA’s liquidity and admitted that every exchange has its regulatory thresholds.
“It has no meaningful impact on the liquidity of ADA, billions of dollars turn around every day… it was a relatively small trading market but that is just the nature of the game, liquidity comes and goes… and of course everybody has different regulatory thresholds,” he said.
The ADA price dropped 14 percent after the announcement was made, while TRX was down 8.6 percent by the time of writing, according to Coinbase data.
Cardano’s jump year-to-date now stands at 818 percent, according to Coinbase data, and is still intact despite the price decay, but some analysts are questioning if the latest headwind from eToro’s limitation on U.S. users is a death knell for ADA.
Regulatory uncertainty in the U.S. is an ongoing concern for cryptocurrency platforms, especially as various authorities crack down on lend-earn products and raise concerns about stablecoins.
eToro’s decision to limit ADA and TRX amplifies that sense of regulatory concern.
Simultaneously, however, Bitstamp, another European crypto exchange, announced that it will include Cardano on its platform. “This … suggests eToro’s constriction is just a specific action by a single platform, and not symbolic of an overall trend of exclusion,” Sergio Goschenko wrote for Bitcoin.com.
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