Cardano's ADA token hasn't captured the investor hype many had hoped for following the Alonzo hard fork.
In what is set to be another letdown, top crypto broker eToro said it would delist the asset from next year.
No More Space for ADA
Late in November, eToro announced it would delist Cardano's ADA token and the TRX token from TRON at the close of 2021. The announcement caused quite a stir, eToro claiming that users could no longer open new positions in ADA and TRX or stake the coins from December 31st.
In addition, eToro said ADA and TRX wallets would be placed on withdraw-only modes until the end of 2022 Q1, meaning users could no longer buy or send coins in these wallets.
While it didn't comment on specific reasoning, eToro said it is taking the delisting action due to regulatory concerns.
A spokesperson for the stockbroker told news sources that the American regulatory landscape is constantly changing, and these changes were responsible for the company's decision to delist ADA and TRX. However, eToro remains committed to growing the crypto economy.
eToro's Surprising Move
Charles Hoskinson, the developer of Cardano, explained that eToro's decision came as a shock. He explained to Business Insider:
"There's currently nothing we've received, no regulatory event, no subpoena, nothing from any regulatory agency, no threats of lawsuits, none of these things, that's why we're so blindsided by it, because actually, the trend has been over the last six months a significant increase of liquidity on Cardano. On our side, we had no indication of this from eToro and it's rather unfortunate that nothing was sent our way."
Hoskinson has a point. While the regulatory landscape in the United States is constantly changing, ADA and Cardano have remained far from the bad graces of regulators - definitely farther than Bitcoin and XRP. Unless the people at eToro know something and aren't letting on, this is truly a surprise.
Cardano's developers have been working to ensure compliance with regulations to the best of their ability. In August, the Cardano Foundation announced a partnership with blockchain analytics provider Coinfirm to ensure compliance with Financial Action Task Force (FATF) reporting guidelines.
According to the announcement, the Cardano Foundation said it would use Coinfirm's services to offer Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) analytics for ADA. The integration would ensure that ADA complies with FATF guidelines and the Sixth Anti-Money Laundering Directive (6AMLD) put up by the European Union.
"AML/CFT analytics is essential for a cryptocurrency to receive mass adoption within regulated markets. The tools and services provided by Coinfirm enable every exchange, custodian, and all other third parties to track the history of ADA held in their wallets," the announcement read.
Coinfirm added that the same AML/CFT analytics would apply to assets minted on the Cardano blockchain to assure full coverage.
More Downward Pressure on ADA
This isn't a good look for Cardano and ADA. The coin has seen a significant rise this year, jumping from $0.18 to a high of $3.1 in August. But things haven't been so great for months.
Excitement surrounded Cardano when the Alonzo hard fork came along. The hard fork added smart contracts to the Cardano blockchain, making Cardano a hub for decentralized application (dApp) developers. But after the Alonzo hard fork went live in early September, ADA's price failed to jump.
Once the hard fork went live, ADA peaked at $2.6. The asset has since dropped by 50 percent and now trades around $1.3. ADA has since slipped on the CoinMarketCap rankings and now occupies the sixth position. This is in contrast to the third position held by the coin in the lead-up to Alonzo's implementation.
Ardent ADA investors believe the coin will still rise - especially as Cardano becomes more valuable to developers. As for now, things aren't looking good.