Regulation
SEC Issues Wells Opinion Against Robinhood, Crypto Community Calls It “Scare Tactics”
that of Robinhood The crypto division received a Wells Notice from the United States Securities and Exchange Commission (SEC) on May 4.
According to a depositTHE Gary GenslerCommission staff led by Robinhood have been investigating Robinhood’s “cryptocurrency listings, cryptocurrency custody, and platform operations” for some time before recommending enforcement action against it.
Dan Gallagher, Robinhood Markets’ chief legal officer, said the company was “disappointed” with the SEC after its attempts to register with the regulator failed. He added:
“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to clearly explain how any case against Robinhood Crypto would be weak on both a factual and legal basis.”
Robinhood is a US-based digital trading app that removed major cryptocurrencies like Cardano, Polygon and Solana after the SEC classified them as securities in a lawsuit against Coinbase and Binance.
Well Notice
The notice against Robinhood is the latest in the SEC’s ongoing review of crypto-related entities.
Last month, the SEC served Uniswap with a Wells review. DEX founder Hayden Adams criticized the regulator’s approach, saying it attacked “established players like Uniswap and Coinbase while overlooking bad practices from entities like FTX.”
In the same way, Consensys Wells received a notice from the SEC during the same period. In response, the crypto-focused company chose to take legal action against the SEC, arguing that categorizing ETH as a security would hinder the growth and use of Ethereum and other blockchain technologies in the United States.
“Scary tactic”
Several crypto players have criticized the SEC for this latest regulatory action against Robinhood.
Jake Chervisnky, Variant Fund’s chief legal officer, said the SEC is abusing the Wells process because it appears to be adopting the tool as a “scare tactic now.”
According to to him:
“If the SEC takes as many enforcement actions as it sent notices to Wells, it will be a flagrant violation of both the law and its congressional mandate. Otherwise, he would clearly be abusing the Wells process to obtain free information and terrorize honest American businesses.”
In the meantime, Adam Cochran argued that the SEC’s actions were intended to prevent new crypto startups.
He added that Gensler has no intention of winning the cases because he is only focused on making headlines to impress.[Elizabeth Warren] enough so that if Biden is re-elected, he will get a seat in the Treasury, or be forced out if Trump wins.