Robinhood Faces SEC Enforcement Action Over Crypto Tokens
Retail trading platform Robinhood Markets (HOOD.O) disclosed on Monday that it had received an enforcement action notice from the U.S. Securities and Exchange Commission (SEC) on May 4 concerning crypto tokens traded on its platform.
The company acknowledged receipt of a “Wells notice,” a precursor to potential enforcement action by the SEC. However, Robinhood emphasized that receiving such a notice does not necessarily imply wrongdoing.
“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be,” stated Dan Gallagher, chief legal, compliance, and corporate affairs officer at Robinhood.
Amidst the SEC’s rigorous stance toward the digital currency industry, Robinhood CEO Vlad Tenev expressed readiness to contest the matter in court if required.
Over the last three years, we’ve reached a state of regulatory onslaught that is harmful to American companies and consumers. The SEC’s continued attack on crypto, coupled with recent rule proposals like the one related to predictive data analytics, mark yet another improper…
— Vlad Tenev (@vladtenev) May 6, 2024
Coinbase (COIN.O), the world’s largest publicly traded cryptocurrency exchange, has previously argued against the classification of crypto assets as securities, a position supported by much of the crypto industry. However, the SEC remains engaged in a legal battle against Coinbase.
Robinhood Crypto allows customers to deposit and withdraw cryptocurrencies to and from its custodial platform, facilitating order routing to liquidity providers based on the best available price. The platform has been striving for nearly two years to register with the SEC.
Last year, Robinhood removed digital tokens Solana, Cardano, and Polygon from its platform.
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