[NEWS] Robinhood announces it has received an enforcement warning from the SEC

Robinhood, a US stock trading app, announced on the 6th that it had received a Wells Notice from the SEC (US Securities and Exchange Commission) regarding the operations of its cryptocurrency division. The company received the Wells Notice on the 4th, stating that charges may be filed once the SEC's investigation is complete.

Dan Gallagher, Robinhood's Chief Legal, Compliance and Corporate Affairs Officer, said in a statement, "We are disappointed that the SEC has decided to issue a Wells Notice related to our cryptocurrency business, despite our many years of working in good faith with the SEC to seek regulatory clarification."

He continued, "We strongly believe that cryptocurrencies listed on our platform are not securities, and we will act based on both the facts and the law."

The target of the SEC's warning this time is Robinhood Crypto. Robinhood revealed in February that it had received a subpoena from the SEC in connection with its cryptocurrency listing, custody, and platform operations. According to the filing on the 6th, the SEC has found probable cause to suggest that Robinhood violated securities laws.

If the case develops into a lawsuit, cryptocurrency trading on Robinhood may be temporarily suspended. The SEC has also indicated that it may order the company to cease operations and pay fines.

In response to the SEC's action, Gallagher stated, "Robinhood Crypto will continue to exist and will continue to innovate and provide services for the benefit of the cryptocurrency industry and our customers, and will continue to fight for regulatory clarity," demonstrating his intention to fight to the end.

Reference:SEC announcement,Robinhood announcement
Image: Shutterstock

Related articles

CFTC Chairman: "We will see a wave of enforcement actions against cryptocurrency companies within the next two years"

US ConsenSys files lawsuit against SEC over Ethereum securitization decision