- As Cardano’s regulatory status remains uncertain, platforms in the ecosystem are compelled to shutter operations.
- Cardax, a Cardano-based DEX, announced it was shutting down.
- The exchange cited several reasons, including strict regulatory requirements.
Cardano is still reeling from the SEC’s Crackdown as major US exchanges delist the token from their platform following its ‘security classification,’ adding copious amounts of pressure on the token.
With Cardano’s regulatory status in the US remaining shrouded in uncertainty and ADA struggling to regain momentum, reputable platforms are being forced to shutter operations, with the latest casualty of this turbulent landscape being Cardax.
Cardax Bites the Dust
Since Cardano came under the SEC’s magnifying glass, it has become increasingly difficult for platforms to engage with the network without drawing heat from the regulator. While many protocols swiftly distanced themselves from ADA to avoid legal problems, independent decentralized platforms remained steadfast in their faith in the Proof-of-Stake network.
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However, they didn’t foresee the long-lasting impact of the SEC’s enforcement translating into an investor exodus and months-long spiraling price action. Reaping the horrors from the SEC’s crypto crackdown, Cardano-based DEX, Cardax, recently announced that it was shutting down after a ‘thorough evaluation of the crypto market.’
The exchange cited several compelling reasons for its decision, such as the regulatory landscape, lack of adoption, etc. Cardax detailed that the global trend toward stricter regulatory requirements and increased oversight by governments had made it increasingly challenging for crypto platforms to continue operations.
Despite their best endeavors, including considering selling the company to ensure the DEX’s survival, the regulatory burden proved insurmountable, hindering their ability to swerve their user base effectively.
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The platform’s struggles with dwindling activity and liquidity further compounded their challenges, with Cardax acknowledging their struggles in staying relevant in the competitive landscape of cryptocurrency exchanges.
Concluding its letter, Cardax said it would cease operating from September and phase out its native token CDX.
On the Flipside
- The US House Financial Services Committee recently advanced a set of groundbreaking crypto bills that could provide much-needed clarity to Cardano and the broader crypto industry.
- Earlier this year, Charles Hoskinson shared that the SEC’s lawsuits against Binance and Coinbase were motivated by an agenda to implement CBDCs and had nothing to do with Securities laws.
- Cardax has been looking for a new owner since May 10.
Why This Matters
With Cardano unable to make a solid recovery, Cardax’s cessation could start a worrying trend.Â
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