Robinhood Markets, Inc. Receives Notice from the Securities and Exchange Commission Regarding Alleged Securities Violations in its Cryptocurrency Sector
Robinhood Markets, Inc. has received a notice from the Securities and Exchange Commission regarding possible securities violations in its cryptocurrency sector.
The company said in a regulatory filing that it had received an investigative subpoena from the SEC regarding issues including virtual currency listing, virtual currency custody, and platform operations.
Robinhood Crypto cooperated with the investigation, the company said.
Last week, the Cryptocurrency Division received a Wells Notice from SEC staff informing the division that a preliminary decision had been made recommending that the SEC file an enforcement action against Robinhood Crypto, Inc. for alleged securities violations.
The filing states that potential litigation could include civil injunction actions, public administrative proceedings, or cease and desist proceedings. Relief that may be sought includes injunctions, cease and desist orders, consumption restrictions, prejudgment interest, civil penalties, and condemnation, revocation, or restriction of activities.
“Despite our years of good faith efforts to work with the SEC for regulatory clarity, including well-known attempts to ‘come and register,’ the We are disappointed in the decision to issue a Wells Notice related to our currency business,” Dan Gallagher, chief legal, compliance and corporate affairs officer at Robinhood Markets, said in a statement Monday. “We strongly believe that the assets listed on our platform are not securities, and the SEC We look forward to working with you.”
The company says its crypto division has chosen not to list certain tokens that the SEC previously claimed were securities of public action against other platforms, or to offer products such as lending or staking. He said he did. It also attempted to register special purpose broker-dealers with the agency.
Robinhood said the SEC's development will not impact customer accounts or the services it provides. The company is scheduled to release its quarterly results after the market closes on Wednesday.
Robinhood stock rose 1% in morning trading.
