Payment processing company PayPal has received a subpoena from the U.S. Securities and Exchange Commission (SEC) in relation to its newly launched PYUSD stablecoin.
Read more on: https://thecryptobasic.com/2023/11/02/sec-goes-after-paypal-with-subpoena-on-its-pyusd-stablecoin/
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According to Robinhood's recent 10-K filing, the Securities and Exchange Commission (SEC) has commenced an investigation into the company's cryptocurrency business. The popular trading platform revealed that it was served with an investigative subpoena from the SEC in December 2022, raising apprehensions regarding the company's adherence to regulatory norms in its cryptocurrency operations.

Robinhood's Cryptocurrency Business Faces SEC Scrutiny with Investigative Subpoena:-

The SEC's subpoena to Robinhood pertains to various aspects of the company's cryptocurrency business, such as cryptocurrency listings, custody, and platform operations. This move by the SEC follows a tumultuous year in the cryptocurrency market, which witnessed several prominent trading venues and lending platforms, including FTX and Three Arrows Capital, file for bankruptcy.

In November 2022, Robinhood's shares took a significant hit after FTX stopped non-fiat customer withdrawals from its platform, resulting in an 18% decline in Robinhood's stock price.

Robinhood has implemented policies and procedures to assess the possibility of a cryptocurrency being regarded as a security under applicable laws. However, the company has acknowledged that its evaluations do not represent conclusive legal judgments, which could potentially subject it to legal or regulatory consequences if any cryptocurrency supported by its platform is deemed a security under U.S. law.

In case any of the cryptocurrencies supported by Robinhood's platform are classified as securities by the SEC or a court, the company's ability to facilitate trading of such cryptocurrencies may be curtailed. While the implications of the SEC subpoena on Robinhood's cryptocurrency business remain uncertain, this development highlights the regulatory challenges associated with operating in the rapidly-evolving and developing cryptocurrency industry.

Robinhood's History with SEC Scrutiny and Enforcement Actions:-

Robinhood has had previous encounters with the SEC. In 2020, the regulator accused Robinhood Financial of deceiving customers and failing to disclose payments received from trading firms for directing customer orders to them. Robinhood settled the charges for $65 million without admitting or denying the SEC's findings.

Nevertheless, the company continued to benefit from the Dogecoin frenzy in 2021 and extended its range of available cryptocurrencies on its platform. However, with the latest subpoena related to its cryptocurrency business, Robinhood is confronted with resurfaced regulatory risks in the swiftly changing and expanding crypto market.

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