The price of cryptocurrency Cardano (CCC:ADA-USD) is under pressure this morning after eToro announced plans to delist it for U.S. users over regulatory concerns.
eToro is an Israeli trading app that provides brokerage services to users with a particular focus on foreign exchange and cryptocurrencies. News that eToro plans to delist ADA next year came as a shock to the cryptocurrency sector and comes as Cardano prepares to make its debut on Bitstamp, one of the largest crypto exchanges in Europe. The news sent ADA down 6.9% to $1.66 per token.
What Happened With the Cardano Crypto
In a written statement last night, eToro said that, after Dec. 31, U.S. users of its popular trading app will no longer be able to open new positions in Cardano, as well as Tron (CCC:TRX-USD). Also, crypto wallets will function in withdraw-only mode until the first quarter of 2022. Then, eToro will also implement limits on selling.
eToro stated that it is delisting Cardano and Tron over regulatory concerns surrounding both assets in the United States, though the brokerage did not elaborate as to what those concerns are. The news has hit ADA particularly hard, coming as a surprise given that Cardano has not been associated with any such regulatory issues, as CoinTelegraph reports.
The news was especially shocking as it landed just as Cardano is listing on the biggest cryptocurrency exchange in Europe, a development that was supposed to extend its rally.
Why It Matters
While some digital assets such as XRP (CCC:XRP-USD) are involved in legal actions with the U.S. Securities and Exchange Commission (SEC), Cardano has not had the same challenges. In fact, Cardano announced a partnership earlier this year with blockchain analytics provider Coinfirm to ensure that it complies with regulatory frameworks around the world, including anti-money laundering rules. The timing of eToro’s delisting announcement is as curious as it is vague.
News of the delisting is hitting Cardano’s price and pushing it lower following a huge rally this year.
So far in 2021, ADA’s price has skyrocketed 840%, making it one of the most lucrative digital assets. ADA beginning to trade on Bitstamp was the latest positive development for the token. But now, news of eToro’s delisting threatens to derail Cardano’s gains.
What’s Next for ADA?
Investors will have to watch for more news related to Cardano, and see if the eToro delisting is an isolated incident or the start of a broader, and more troubling, trend. Does eToro know something about ADA that is not yet public? In the meantime, the delisting creates the worst type of situation for investors and fans of Cardano: uncertainty.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.