SEC Nudges Robinhood Over Crypto Operations

Zinger Key Points
  • SEC moves against Robinhood: SEC preparing enforcement on Robinhood for potential securities law violations, company reveals.
  • Robinhood defends crypto business: Despite SEC's Wells Notice, Robinhood's Dan Gallagher vows robust defense.

The Securities and Exchange Commission (SEC) is preparing for a potential enforcement action against Robinhood Markets, Inc HOOD, as revealed by the trading firm in a recent filing. 

Robinhood reported on Monday that the SEC had issued a warning over the weekend for its crypto business, indicating that the company could face charges once the investigation concludes.

Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer, expressed disappointment with the SEC’s decision to issue a Wells Notice regarding the firm’s U.S. crypto business, CNBC reports.

Also Read: Has Robinhood Halted 24-Hour Trading? Social Media Explodes With Screenshots And Theories: ‘Tomorrow Is Not Going To Be Pretty’

In a blog post, he emphasized their long-standing cooperation with the SEC for regulatory clarity. He stated, “We believe firmly that the assets on our platform aren’t securities and are prepared to show the SEC the weakness of any case against Robinhood Crypto.”

In February, the SEC had already subpoenaed Robinhood concerning its cryptocurrency listings, platform operations, and custody. 

In Monday’s filing, the SEC suggested that Robinhood may have violated securities law and outlined potential remedies, such as civil injunctions, administrative proceedings, and penalties.

Previously, analysts projected an upside to Robinhood stock, citing strong transaction revenue growth.

Robinhood Markets stock gained over 102% in the last 12 months. Investors can gain exposure to the stock via the ARK Next Generation Internet ETF ARKW and the ARK Fintech Innovation ETF ARKF.

Price Action: HOOD shares traded higher by 0.22% at $17.99 on the last check Monday.

Also Read: Robinhood CEO Vlad Tenev Shares Q1 Wins: $30M Bonus Drives User Growth, New Gold Card, UK Launch And More

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Robinhood crypto illustration. Courtesy photo.

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