Robinhood Markets Inc. (NASDAQ:HOOD) said in a regulatory filing Monday that it has received a formal warning from regulators about potential enforcement actions related to its cryptocurrency operations.
The warning, known as the U.S. Securities and Exchange Commission’s Wells Notice, specifically relates to Robinhood Crypto and various aspects of its cryptocurrency business, including listings, custody procedures and platform operations.
According to the filing, SEC staff notified Robinhood that the SEC had made a “preliminary determination” recommending that it take enforcement action against the company.
The potential consequences of this action may include injunctions, cease and desist orders, clawbacks of profits, and other penalties or restrictions on business activities.
Robinhood previously said it received subpoenas in connection with the investigation and cooperated with the SEC throughout the process.
The Wells Notice provides the company with an opportunity to respond to the SEC’s allegations, and it is important to note that the issuance of such a notice does not necessarily guarantee that enforcement action will ultimately be taken.
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