The Israel-based trading platform eToro announced on Tuesday that it will restrict access to the two cryptocurrencies cardano (ADA) and tron (TRX) for users in the United States. The price of both tokens fell sharply in the market following the news.
“US users will not be able to open new ADA or TRX positions starting on December 26, 2021. Additionally, staking for those assets will end on December 31, 2021,” eToro said in its announcement.
US users who hold positions in ADA or TRX can still continue to hold on to their positions, or to sell the assets on the platform for USD, eToro said, while emphasizing that it is only the opening of new positions that will be restricted for now.
However, the announcement further said that selling will also be restricted on the trading platform at some point during the first quarter of 2022, which effectively means that the tokens will be completely delisted. It emphasized that affected users will be notified before this happens.
According to eToro’s announcement, the changes are due to “business-related considerations in the evolving regulatory environment.”
When reached by Cryptonews.com for further clarification, a representative for eToro reiterated the wording from the announcement, saying that “the regulatory landscape for crypto is evolving rapidly.”
Important to note, however, is that the restrictions on ADA and TRX will only apply to US users, and that eToro also has a large presence in Europe and in other countries outside of the US.
Still, the move by eToro did come as a surprise, given that no other crypto exchanges have taken similar action on cardano and tron, which are generally not seen as being top candidates for regulatory crackdowns. This is unlike for instance XRP, which for a long period of time has been on the radars of regulators, leading Coinbase to delist the coin last year.
“As the crypto industry grows in both size, sophistication, and impact, regulatory pressure on the altcoin space is likely to keep increasing, especially given [SEC Chair Gary Gensler’s] recent comments around the probability that certain tokens and base-layer tokens may be deemed securities,” Ben Caselin, Head of Research & Strategy at crypto exchange AAX, told Cryptonews.com in a comment.
Caselin added that “reasons may vary” for why eToro is choosing to delist the two coins in question, although he admitted that it is “understandable” given that eToro is a regulated brokerage platform that serves the US market, and that it is “not crypto native.”
“At AAX, we pay great attention to any regulation that may apply to any of the tokens or financial services we offer on our platform,” Caslin further said, before adding that while they consider what their peers do “neither ADA nor TRX are being considered for delisting” on their exchange.
As the regulatory pressure continues to build up, however, AAX’s research and strategy head made it clear that decentralization is becoming increasingly important for crypto projects, with “bitcoin and other more decentralized protocols” set to benefit the most. “[..] we generally see this process as a positive development that will bring more legitimacy to crypto and render the industry as a whole more robust,” AAX’s Caselin finally said.
Following yesterday’s announcement from eToro, both ADA and TRX fell in the crypto market.
ADA received the harder hit, with a 24-hour fall of 5.4% to a price of USD 1.68 at 12:23 UTC. At the same time, TRX was down 2.5% to a price of USD 0.0995.
By comparison, the native tokens of other smart contract platforms like ethereum (ETH) and solana (SOL) went up today. ETH increased 3.5% for the past 24 hours to a price of USD 4,291, and SOL is up 1% to nearly USD 215.
Meanwhile, the 6th coin by market capitalization, ADA, is down 11% over the past week, and the 31st, TRX, fell 9.8% in the same period.
According to data from CoinGecko, eToro-operated eToroX was responsible for 1.12% of ADA’s trading volume over the past 24 hours, which is roughly equivalent to the amount of volume seen for the coin on Kraken and Binance.US.
For TRX, meanwhile, eToroX’s share of the trading volume was much smaller, with just 0.19% of trading over the past 24 hours taking place on the exchange.
Updated at 15:26 UTC with a comment from Ben Caselin.