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Robinhood to challenge SEC warning on crypto trades
Robinhood Markets Inc. is contesting a Wells notice from the U.S. Securities and Exchange Commission (SEC), which could lead to enforcement action against its cryptocurrency division, Robinhood Crypto (RHC).
The warning hints at possible securities law violations, but Robinhood maintains that its cryptocurrency listings do not constitute securities.
The SEC Wells Notice received by Robinhood raises issues with RHC’s cryptocurrency listings, custody practices, and overall platform operations.
Robinhood, a popular stock and cryptocurrency trading app, could face civil injunctions, relief or fines.
Robinhood has expressed its willingness to engage in the SEC’s investigation and has sought clearer regulatory guidance through previous registration efforts.
“We firmly believe that the assets listed on our platform are not securities, and we look forward to working with the SEC to clarify how weak any case against Robinhood Crypto would be on both the facts and the law,” Dan Gallagher, Chief Legal Officer, Head of compliance and corporate affairs, he stated in a declaration on Monday.
The SEC’s focus on Robinhood is part of a larger pattern of regulatory trends, with similar actions by the agency against other crypto entities such as Uniswap and Coinbase.
Robinhood’s crypto division has done this before paid a $30 million fine to the New York Department of Financial Services for anti-money laundering and consumer protection violations.