Robinhood Crypto, the cryptocurrency arm of the popular trading platform Robinhood, has disclosed that it has received a Wells notice from the Securities and Exchange Commission (SEC), signaling the possibility of impending enforcement action by the US regulator.
The Wells notice comes after Robinhood revealed in February that it had been subpoenaed by the SEC regarding its cryptocurrency listings, custody, and platform operations.
Dan Gallagher, Chief Legal, Compliance, and Corporate Affairs Officer at Robinhood, expressed disappointment at the SEC’s decision to issue the Wells notice, stating, “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 US crypto business.”
Gallagher, a former SEC commissioner, reiterated Robinhood’s belief that the assets listed on its platform are not securities. He expressed readiness to engage with the SEC to clarify the situation and emphasized the company’s confidence in the strength of its case both factually and legally.
Robinhood also highlighted its proactive measures to address regulatory concerns, including refraining from listing certain tokens and offering products like lending and staking, which the SEC has previously deemed as securities in actions against other platforms.
As part of its compliance efforts, Robinhood ceased support for tokens like Cardano, Polygon, and Solana on June 27, following their classification as securities in SEC lawsuits against industry giants Binance and Coinbase.
The company’s response to the Wells notice reflects its commitment to regulatory compliance and its determination to navigate the evolving regulatory landscape in the cryptocurrency industry. Despite the challenges posed by regulatory uncertainty, Robinhood remains focused on providing a compliant and user-friendly platform for its customers.