Robinhood Crypto, the cryptocurrency arm of brokerage Robinhood Markets, received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) on May 4.
The exchange said in a Form 8-K filed today that SEC staff has made a preliminary decision to recommend enforcement action against the cryptocurrency unit alleging securities violations.
“After years of good faith efforts with the SEC for regulatory clarity, including the well-publicized ‘come in and register’ attempt, we are disappointed that the agency has decided to issue Wells notices related to its U.S. cryptocurrency operations.” Dan Gallagher, Chief Legal, Compliance and Corporate Affairs Officer at Robinhood Markets, Inc, said in a statement: “We firmly believe that the assets listed on our platform are not securities, and we look forward to working with the SEC to clarify how weak the case against Robinhood Crypto is on both fact and law.”
Last year, Robinhood Markets said it had received an investigative subpoena from the SEC regarding its cryptocurrency listing. Robinhood Crypto supports over a dozen cryptocurrencies for trading, including bitcoin, ether, dogecoin, and shiba inu.
Last month, decentralized cryptocurrency exchange Uniswap received a Wells Notice from the SEC. “It’s been clear for some time that the SEC has decided to focus on attacking long-standing good actors like Uniswap and Coinbase rather than creating clear, informed rules,” Uniswap founder Hayden Adams said at the time.
Ethereum development studio Consensys also received a Wells notice from the SEC in the same month. Consensys later sued the SEC, saying regulating ether as a security would jeopardize the U.S.’s ability to use Ethereum and other blockchains. “These impacts will extend far beyond digital asset trading, jeopardizing the future of countless new innovations, products, and American jobs that the next generation of the Internet will unleash,” Consensys said at the time.
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