Crypto News– The SEC just served Robinhood a Wells notice, knocking their share price down 2.5% in pre-market trading to $17.95. This letter signifies the end of the SEC’s snooping into Robinhood’s U.S.-based crypto arm.
The SEC Issues Wells Notice to Robinhood’s Crypto Division
Looks like the SEC’s itching to recommend an enforcement action for alleged securities shenanigans in Robinhood’s crypto listings and custodial operations. Despite Robinhood’s efforts to cozy up to the SEC, like trying to register, this investigation bombshell dropped anyway. Dan Gallagher, Robinhood’s big legal cheese, must be sweating bullets over this.
Gallagher wrote in a May 6 blog post:
After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business.
Crypto Regulation: Echoes of 1932 Equities Oversight
Robinhood’s been busting its chops to steer clear of securities snafus. They’ve played it cautious by steering clear of listing certain tokens and nixing crypto lending and staking services that other platforms got slapped for in SEC lawsuits. But, here’s the kicker: Robinhood’s top compliance honcho spilled the beans that the feds haven’t laid down the law clearly enough. It’s like trying to play a game when nobody’s bothered to set the rules straight. This murky regulatory soup? It’s not just a headache for Robinhood; it’s stunting crypto’s growth across the board.
During a courtroom showdown on June 6, Gallagher, who once wore the SEC commissioner hat from 2011 to 2015, dropped this bombshell:
Unfortunately, Robinhood and other digital asset market participants in the U.S. face a patchwork of state regulatory frameworks, not all of which are consistent, as well as a lack of regulatory clarity at the federal level. In many ways, the regulatory landscape for digital assets is like it was for the equities markets in 1932.
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