“The regulatory landscape for crypto is evolving rapidly… As a result, we will be limiting the ability for US users to open new positions in, or earn staking rewards for, ADA and TRX” a spokesperson from eToro told Business Insider.
The surprise delisting triggered selling in ADA. The cryptocurrency now trades more than 5% down on the week, with its market cap having tumbled from above $61B at the start of the week to under $58B as of Thursday.
As of the 26th of December 2021, eToro US users will no longer be able to buy the cryptocurrency. Then, after the 31st of December 2021, users holding ADA will no longer be able to earn staking rewards.
In a video response to the decision, Charles Hoskinson, Cardano’s founder, blamed the decision on a lack of regulatory clarity and played down the impact the delisting would have on ADA’s price in the long term.
He explained that European-based exchanges like eToro tend to limit their US exposure, given that US exposure comes with high regulatory costs. US-based exchanges like Coinbase, which are already paying for US regulatory compliance, have an easier in the US, he added.
About Cardano and its Cryptocurrency ADA
Cardano is an open-source, decentralised blockchain platform that achieves consensus using proof-of-stake and can facilitate internal transactions using its cryptocurrency ADA.
It was founded in 2015 by Charles Hoskinson, one of Ethereum’s co-founders, and was initially funded through an initial coin offering (ICO). In 2017, Cardano launched its crypto-currency ADA.
ADA is the largest cryptocurrency (by market capitalisation) to use a proof-of-stake blockchain. Proponents of proof-of-stake blockchains argue that it is significantly more environmentally friendly than proof-of-work alternatives such as Bitcoin and Ethereum.
Back in February, Hoskinson estimated that the Cardano network used just 0.01% of the energy used by the Bitcoin network.