Robinhood’s cryptocurrency division may quickly be in hassle with the Securities and Change Fee. In an 8-K filing submitted on Saturday, Robinhood revealed that it acquired a Wells discover from the SEC’s employees recommending the company take motion towards the buying and selling platform for alleged securities violations.
Robinhood says it acquired the Wells discover after cooperating with the SEC’s requests for investigative subpoenas about its crypto listings, custody of cryptocurrencies, and the platform’s operations. A Properly discover is a letter from the SEC that warns an organization of a possible enforcement motion. The SEC’s response may embrace an injunction, a cease-and-desist order, disgorgement, limits on actions, and / or civil penalties.
“We firmly imagine that the belongings listed on our platform are usually not securities and we sit up for participating with the SEC to clarify simply how weak any case towards Robinhood Crypto could be on each the info and the regulation,” Dan Gallagher, Robinhood’s chief authorized, compliance, and company affairs officer, mentioned in an announcement.
Robinhood says it already made the “troublesome alternative” to delist sure tokens — including Solana, Polygon, and Cardano — in response to the SEC’s lawsuits towards different buying and selling platforms. Previously, the SEC has argued that some cryptocurrencies are thought of securities, which might require exchanges to register with the SEC. This may give the company regulatory management over the exchanges and the registered tokens.
Robinhood may face a protracted authorized battle if it chooses to combat the SEC’s potential enforcement motion. The corporate’s shares have already dipped in response to the information.
