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Robinhood's Cryptocurrency Business Is Next Target in US Crackdown – DL News, Filing Reveals

Robinhood's Cryptocurrency Business Is Next Target in US Crackdown – DL News, Filing Reveals
  • Robinhood can pay civil fines.
  • The SEC targeted Coinbase, ConsenSys, and Uniswap.

The Securities and Exchange Commission has added another company to its list of cryptocurrency targets, this time targeting the popular stock trading app Robinhood.

Robin Hood An 8-K has been filed It revealed on May 4 that it had received a Wells Notice, in which SEC staff recommended the commission take enforcement action against Robinhood's cryptocurrency business, alleging securities violations.

The potential action could result in Robinhood being issued a cease and desist order and paying civil penalties.

Dan Gallagher, chief legal officer at Robinhood, He said In a post they felt “disappointed” with the SEC’s move despite “years of good faith attempts” to work with the SEC.

“We firmly believe that the assets listed on our platform are not securities,” he said.

The company behind the popular stock and cryptocurrency trading app has been issued a summons February 2023. The subpoena was related to Robinhood's platform operations, cryptocurrency listings, and how users' funds are held.

Besides trading stocks like Tesla and Google, Robinhood allows users to trade Dogecoin, Ethereum, Bitcoin, and other cryptocurrencies. The company launched a digital wallet dedicated to containing cryptocurrencies in 2023. At the end of last year, it had approx. 11 million users per month.

Gary vs crypto

The SEC, led by its anti-crypto chief, Gary Gensler, has been on a warpath, hitting cryptocurrency companies with similar allegations.

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The commission is locked in a legal battle with the largest cryptocurrency exchange in the United States, Coinbase. The SEC alleges that Coinbase is acting as an unregistered securities broker by listing various cryptocurrencies.

See also  Economy: The state budget deficit is also very large due to low value-added tax revenues

Gensler and his staff also took on a DeFi proponent.

Earlier this year, the SEC notified Uniswap via fine notice that it would also impose fees. The company that built the popular decentralized exchange has vowed to fight the Securities and Exchange Commission over its allegations.

As they exist today, Gensler says, the majority of cryptocurrencies, with the exception of Bitcoin, are unregistered securities.

They, like entities issuing stocks and bonds, must meet regulatory requirements.

Cryptocurrency projects have taken umbrage at this proposal, arguing that digital assets deserve tailored regulations.

Liam Kelly too DL News Berlin correspondent. Call him on [email protected].

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