Digital Chamber, a trade association for the digital asset sector, criticized the SEC for issuing the Wells Notice to Robinhood Crypto.
The group said in a statement on May 6 that it was “deeply disappointed and concerned” by the notice. The association also described this as an example of regulatory overreach.
The Digital Chamber highlighted continued resistance to the SEC, which it claims is expanding its scope without congressional approval. Congress said it was “actively considering legislation” to clarify its regulatory jurisdiction over cryptocurrencies and accused the SEC of violating this process.
To resolve the jurisdictional issue, the Digital Chamber called for “immediate legislative action” and insisted that SEC Chairman Gary Gensler testify before Congress.
The Digital Chamber supported Robinhood, pointing to the company’s self-described good-faith compliance efforts and attempts to register with the SEC.
The association stated:
“The Digital Chamber stands ready to assist Robinhood Crypto and other affected companies in seeking a resolution that protects their ability to operate and innovate and protects the rights of digital asset users and entrepreneurs across the country.”
It did not announce its intention to file an amicus brief in support of Robinhood, but noted that it had done so previously, citing a February filing in support of cryptocurrency exchange Kraken.
The Digital Chamber also argued that the SEC’s actions are inconsistent with the regulator’s investor protection obligations, saying its aggressive enforcement impacts emerging companies and reduces investors’ ability to make autonomous financial decisions.
On May 4, Robinhood revealed that its subsidiary Robinhood Crypto had received the Wells letter from the SEC. We described the development in more detail in our May 6 post.
The Wells notice allows the company to respond to the SEC’s claims before the agency pursues enforcement action. However, notification does not guarantee that formal action will be taken.
Robinhood Crypto’s latest legal troubles come as it faces greater regulatory attention from U.S. authorities, whose crosshairs are aimed at the rapidly evolving cryptocurrency market.
Some cryptocurrency lawyers have referred to the ongoing issuance of Wells notices to companies like Robinhood, Uniswap, and Consensys as a “carpet bombing campaign” against the cryptocurrency sector. They argue that this approach could overextend the SEC’s authority and create significant operational and legal problems for affected companies.