Cryptocurrency trading services provider Robinhood Crypto was issued a Wells notice by the United States Securities and Exchange Commission (SEC) staff. This notice pertains to various aspects of the service’s operations, including cryptocurrency listings, custody procedures, and platform operations, among other areas.
Wells Notices serve as initial notifications informing companies that the SEC has gathered adequate information to potentially initiate an enforcement action against them. Typically, these notices result in regulatory actions taken by the SEC.
Robinhood Crypto has been notified by the SEC of a “preliminary determination” suggesting potential charges for violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934. Thus, the regulator can potentially implement civil injunctive measures, public administrative proceedings, and cease-and-desist proceedings. Remedial measures sought may include injunctions, disgorgement, civil financial penalties, and censure, among others.
SEC Cracks Down On Crypto Companies. Uniswap And Consensys Receive Wells Notices
Robinhood Crypto provides a platform for trading a wide range of cryptocurrencies at competitive rates, enabling users to buy, sell, and store them. Currently, the platform supports trading for 24 cryptocurrencies, including popular choices like BTC, ETH, SOL, XRP, and DOGE, among others. When participating in cryptocurrency trading on Robinhood Crypto, users can earn a portion of their trade value back in BTC as a reward. The amount of this reward is calculated based on the total volume of cryptocurrency trades executed during the month.
Last year, Robinhood Markets, the brokerage firm behind the Robinhood Crypto, received an investigative subpoena from the SEC concerning the listing of cryptocurrencies.
Recently, the decentralized cryptocurrency exchange Uniswap and Ethereum development studio Consensys also received Wells Notices from the SEC. Subsequently, Consensys took legal action against the SEC, expressing concerns that classifying ETH as a security could impede the United States’ utilization of Ethereum and other blockchain technologies.
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