The classification of various cryptocurrencies as securities by the SEC has led Bitstamp to suspend trading on 7 assets. Despite the trading suspension, US clients will continue to have access to these assets within their accounts. Recent SEC lawsuits against major industry players and heightened scrutiny of digital assets underscore the decision.
Bitstamp cryptocurrency exchange has announced significant changes to its cryptocurrency offerings for US clients. The platform will suspend trading in seven cryptocurrencies, including big assets like AXS, MATIC, and SOL, effective August 29, 2023.
The United States Securities and Exchange Commission (SEC) had previously classified all cryptocurrencies mentioned by the exchange as securities.
According to the Aug. 8 announcement, trading in 7 cryptocurrencies will soon become unavailable to US clients due to “recent events.” Although the company did not specify the reason for its suspension, the seven tokens are alleged by the US Securities and Exchange Commission as unregistered securities in its complaints against cryptocurrency exchanges Binance and Coinbase. Bitstamp wrote the following:
“We kindly ask our users to promptly execute any desired buy or sell orders involving the affected assets before August 29, 2023. After this deadline, trading activities related to [7 cryptocurrencies] will be permanently disabled on the Bitstamp platform.”
Trading of 7 Cryptocurrencies Suspended on Bitstamp
The cryptocurrencies subject to suspension have either been previously classified as securities by the SEC or recently identified as those in ongoing lawsuits. These designations are based on the agency’s application of the Howey test, a legal framework used to determine whether a particular asset qualifies as a security. The sale of unregistered securities often violates US law. Securities must be registered with the SEC before being offered to the general public.
The following digital assets will be discontinued for US clients on Bitstamp:
- AXS (Axie Infinity Shard)
- CHZ (Chiliz)
- MANA (Decentraland)
- MATIC (Polygon)
- NEAR (Near Protocol)
- SAND (The Sandbox)
- SUN (Sun)
Continued Access to Assets Amid Regulatory Ambiguity
While the exchange will stop trading these cryptocurrencies, Bitstamp emphasized that US clients would still be able to hold these assets in their accounts. This essential means they can remove them as needed. The exchange will cancel any new orders related to these assets that arrive after the deadline.
The agency specified 19 cryptocurrencies in particular as values in the legal action, resulting in more extensive scrutiny of various digital assets. Previously, in May, the regulator classified 46 cryptocurrencies as securities.
Therefore, the exchanges’ adjustment to the SEC verdict is a significant development in the cryptocurrency industry, especially for US traders.
The SEC’s allegations against the tokens have yet to be proven in court. However, other fintech companies such as Revolut have voluntarily delisted them for US residents amid SEC litigation against Binance and Coinbase. The sandbox had also begun requiring Know Your Customer verification for SAND wagers after the event. The SEC currently alleges that 68 cryptocurrencies are securities.
Founded in 2011 and headquartered in Luxembourg, Bitstamp is currently the world’s oldest cryptocurrency exchange. The platform offers around 30 coins and tokens for trading. Approximately $164 million worth of digital currencies were traded on Bitstamp in the last 24 hours.
By Audy Castaneda
