Robinhood’s cryptocurrency division might 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 workers recommending the company take motion in opposition to 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 Nicely discover is a letter from the SEC that warns an organization of a possible enforcement motion. The SEC’s response might embody an injunction, a cease-and-desist order, disgorgement, limits on actions, and / or civil penalties.
“We firmly imagine that the property listed on our platform usually are not securities and we sit up for participating with the SEC to clarify simply how weak any case in opposition to Robinhood Crypto could be on each the information and the legislation,” Dan Gallagher, Robinhood’s chief authorized, compliance, and company affairs officer, mentioned in a press release.
Robinhood says it already made the “troublesome selection” to delist sure tokens — including Solana, Polygon, and Cardano — in response to the SEC’s lawsuits in opposition to different buying and selling platforms. Up to now, the SEC has argued that some cryptocurrencies are thought-about securities, which might require exchanges to register with the SEC. This is able to give the company regulatory management over the exchanges and the registered tokens.
Robinhood might face a protracted authorized battle if it chooses to struggle the SEC’s potential enforcement motion. The corporate’s shares have already dipped in response to the information.