The US Securities and Exchange Commission (SEC) continues to direct its focus on digital assets, warning Robinhood Markets of potential enforcement action over its cryptocurrency business through a Wells notice.
Robinhood, known for its commission-free stock trading, disclosed on Monday that the SEC’s staff had issued the Wells notice, which is used by the SEC to inform entities of possible enforcement action, and the company can respond to the SEC’s allegations before any enforcement action is taken.
These responses can sometimes convince the SEC to back down, however,if Robinhood’s response is unsuccessful, the SEC could pursue a lawsuit or settle with the company to resolve the investigation.
Robinhood’s chief legal officer, Dan Gallagher, expressed disappointment with the SEC’s move, stating the company believes that “the assets listed on our platform are not securities.”
Under Chair Gary Gensler, the SEC has taken a firm stance, arguing that most crypto tokens fall under the agency’s regulatory purview and that platforms facilitating their trade should register with the SEC. This stance has led to enforcement actions against other prominent cryptocurrency exchanges including Coinbase, Kraken, and Binance.
Robinhood had previously revealed that it received an investigative subpoena regarding its cryptocurrency dealings. While the company has discontinued trading of certain tokens in response to SEC actions against other exchanges, its website still offers over a dozen cryptocurrencies, including Bitcoin, Ether, Litecoin, Aave, and Chainlink.
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- Source: https://www.cryptocompare.com/email-updates/daily/2024/may/07/
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