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Robinhood Crypto May Face SEC Securities Violation Lawsuit, After Wells Alert : Tech: Tech Times
The US Securities and Exchange Commission’s (SEC) massive crackdown on cryptocurrencies could lead to its next lawsuit against Robinhood Markets, the renowned fintech company. This came after the SEC sent Wells a notice, meaning its investigation has concluded and a potential securities infringement lawsuit could follow for the company’s cryptocurrency trading service.
The company maintained that it followed regulations set forth by the SEC, including its cooperation during the investigation conducted by the regulatory agency.
Robinhood Crypto May Face SEC Securities Violation Lawsuit
(Photo: Justin Sullivan/Getty Images)
Robinhood revealed via its Press release that it had received a Wells Notice from the SEC, which the company said recommended that the Commission take “enforcement action.”
Robinhood Crypto, the company’s cryptocurrency exchange built on its renowned fintech and stock trading platform, is facing a potential lawsuit from the SEC Ars Tecnica. This follows SEC filings confirming that Robinhood has received subpoenas from the SEC, asking to examine its cryptocurrency listings, cryptocurrency custody, and its platform operations.
THE The SEC may file a petition a “civil injunctive action, a public administrative proceeding, and/or a cease-and-desist proceeding.”
Read also: FTX Founders, SBF, Gary Wang’s $455M Robinhood Stock Taken by Feds from UK Company
Robinhood: Followed SEC regulations for cryptocurrencies
Dan Gallagher, head of legal, compliance and corporate affairs at Robinhood Markets, said the company has been following the SEC and asking for regulatory clarity for its business. “We are disappointed that the agency has decided to issue a Wells Notice regarding our cryptocurrency business in the United States,” He added.
Gallagher previously argued that the SEC was unclear on cryptocurrency regulations despite the company requesting them, leaving Robinhood confused about the industry and what to follow.
Robinhood and its investment platform
Robinhood rose to popularity in early 2021 for the massive stock trading phenomenon, first by taking over Reddit and later through its platform. The fame of the “meme stock” has seen a significant rise, and Robinhood has been among those who have changed the global trading landscape, with the company becoming a billion-dollar business at its peak.
Next, the company has started offering a cryptocurrency wallet within the platform, with Robinhood focusing on the Web3 protocol. After massive demand, he added more after initially seeing two million on his waiting list.
That said, FTX at one point believed that to acquire Robinhood’s business and has its own services, including stock trading and cryptocurrency trading features.
Following the SEC’s massive crackdown on cryptocurrency exchanges, including FTX and Binance, Robinhood is now under the regulatory agency’s watchful eye. The agency recently concluded its investigation. Robinhood expressed his feelings about his cooperation in the investigation and is following the rules, but there may be an imminent lawsuit coming.
Related article: Robinhood Releases 3 Crypto Tokens Amid SEC Crackdown: Solana, Polygon, and Cardano to Be Removed from List
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