Robinhood faces SEC scrutiny in connection with cryptocurrency trading
Robinhood is responding to a notice from the U. S. Securities and Exchange Commission.
The company maintains that its assets are not securities.
However, #Robinhood is seeking clarification from regulators.
Robinhood has officially responded to a notice from the U. S. Securities and Exchange Commission (SEC).
The notice outlines possible enforcement actions against Robinhood Crypto (RHC), the company's #cryptocurrency division.
Dan Gallagher, Robinhood's chief legal, compliance and corporate affairs officer, expressed disappointment with the regulator's decision.
"After several years of good faith efforts to seek clarification from the SEC, including our famous 'come and register' efforts, we are disappointed that the SEC has decided to issue a Wells Notice regarding our U. S. cryptocurrency business," Mr. Gallagher said.
Robinhood argues that the #cryptocurrencies on its platform are not securities and is prepared to prove the weakness of the SEC's arguments against it factually and legally. The company has been careful to keep a close eye on regulatory realities, choosing not to list certain tokens and avoiding services such as cryptocurrency lending and staking that the SEC has previously applied to other platforms.
However, the SEC alleges that Robinhood uses its investor relations website and the "Overview" tab in its news feed to disseminate information to the public on a broad, non-exclusive basis in accordance with the SEC's fair disclosure rules.
Robinhood Crypto, LLC ("RHC") is known to have received a subpoena from the Securities and Exchange Commission ("SEC"), and on May 4, 2024, RHC filed a "Wells Notice" in which the staff notified RHC of a "preliminary ruling" recommending that it file suit. " The SEC's commentary states, "
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