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Robinhood Crypto Receives Wells Notice from US SEC
(Reuters) – Retail trading platform Robinhood Markets said on Monday it received a notice of enforcement action from the U.S. Securities and Exchange Commission (SEC) on May 4 over crypto tokens traded on its platform.
The company said it had received a so-called “Wells Notice,” which the SEC issues when it intends to take enforcement action against them. Such warnings do not necessarily mean that the company is involved in illegal acts.
“We firmly believe that the assets listed on our platform are not securities and look forward to working with the SEC to clarify how weak any case against Robinhood Crypto would be,” Dan Gallagher, head of legal, compliance and corporate affairs at Robinhood, said said.
The SEC has taken a tough stance on the digital currency industry, arguing that most cryptocurrency tokens are securities and subject to its registration rules, while crypto firms have accused it of overreach. The regulator declined to comment on the enforcement action notice.
“If necessary we will use our resources to contest this matter in court,” Robinhood CEO Vlad Tenev said in a post on X.
Coinbase, the world’s largest publicly traded cryptocurrency exchange, has also previously argued that cryptocurrencies, unlike stocks and bonds, do not meet the definition of securities, a position held by the vast majority of the cryptocurrency industry. The SEC is engaged in a legal battle against Coinbase.
Robinhood Crypto allows customers to deposit and withdraw cryptocurrencies to and from its custody platform and also routes customer orders to liquidity providers based on the lowest price. He has been trying to register with the SEC for almost two years.
Last year it removed digital tokens Solana, Cardano and Polygon from its platform.
(Reporting by Mehnaz Yasmin in Bangalore; Additional reporting by Arasu Kannagi Basil; Editing by Shounak Dasgupta and Krishna Chandra Eluri)