Robinhood Crypto joins other major exchanges as target of SEC Wells notice
Earlier today Robinhood Crypto said that it'd received a so-called Wells notice from the Securities and Exchange Commission on May 4, suggesting the regulator may be prepping some sort of enforcement action against the retail trading giant. (Robinhood Markets Inc. is the parent company of Sherwood Media.)
The SEC has argued that many cryptocurrencies are securities, and should be regulated as such. Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer, said in a statement that the company believes the assets listed on its crypto platform are not securities.
A Wells notice does not always precede an enforcement action, which Robinhood said in an 8-K could include an injunction, a cease-and desist order, or civil penalties (among other outcomes).
The market mostly brushed off the news, with Robinhood Markets shares largely recovering after a brief morning slide.
The Wells notice represents the latest in a string of crypto-focused actions taken by the SEC. Last year, the regulator sued Coinbase for possible violations of securities laws, a battle which is still ongoing. The decentralized crypto exchange Uniswap also recently received a Wells notice.
Regardless of the specific outcome following this month’s Robinhood-focused Wells notice, the SEC’s crackdown has the potential to reshape the broader crypto market. Last year, Kraken said it’d end its US staking services after settling charges with the SEC. And after the regulator sued Coinbase last June, Robinhood delisted three tokens the SEC had called out in that suit.
The SEC has argued that many cryptocurrencies are securities, and should be regulated as such. Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer, said in a statement that the company believes the assets listed on its crypto platform are not securities.
A Wells notice does not always precede an enforcement action, which Robinhood said in an 8-K could include an injunction, a cease-and desist order, or civil penalties (among other outcomes).
The market mostly brushed off the news, with Robinhood Markets shares largely recovering after a brief morning slide.
The Wells notice represents the latest in a string of crypto-focused actions taken by the SEC. Last year, the regulator sued Coinbase for possible violations of securities laws, a battle which is still ongoing. The decentralized crypto exchange Uniswap also recently received a Wells notice.
Regardless of the specific outcome following this month’s Robinhood-focused Wells notice, the SEC’s crackdown has the potential to reshape the broader crypto market. Last year, Kraken said it’d end its US staking services after settling charges with the SEC. And after the regulator sued Coinbase last June, Robinhood delisted three tokens the SEC had called out in that suit.
