The U.S. Securities and Exchange Commission (SEC) has issued a Wells notice to popular trading platform Robinhood.
Following the Wells notice, Robinhood's share price (HOOD) fell 2.5% to $17.95 as of 12:50 UTC on the premarket. According to court documents, the Wells notice was sent on May 4.
A Wells notice is a letter sent by securities regulators stating that they have completed an investigation into a defendant (in this case, U. S. #cryptocurrency business Robinhood).
According to the statement, the SEC investigated Robinhood's cryptocurrency listings, the cryptocurrency custodian's activities, and issued a "preliminary ruling" recommending that the SEC initiate enforcement proceedings for alleged securities law violations.
Gallagher wrote on his blog on May 6:
"After several years of good faith attempts to get clarification from the SEC, including our famous 'come and register' attempt, we are disappointed that the SEC has decided to issue a Wells Notice regarding our cryptocurrency business in the US.
Mr. Gallagher added that #Robinhood does not consider its listed assets to be securities:
"We firmly believe that the assets listed on our platform are not securities, and we look forward to engaging with the SEC to clarify how weak the case against Robinhood Crypto is from a factual and legal standpoint. "
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