Robinhood Markets, a outstanding retail buying and selling platform, introduced its intention on Might 7 to problem the US Securities and Trade Fee (SEC) in courtroom following allegations of securities violations.
The agency disclosed that its Robinhood Crypto had acquired a Wells Discover from the SEC over the weekend, indicating that prices might be levied towards Robinhood upon the conclusion of an investigation. CEO and co-founder Vlad Tenev revealed the corporate’s stance shortly after receiving a Wells Discover from the securities regulator.
Robinhood CEO Vlad Tenev Criticizes US SEC’s Enforcement Actions
Expressing his discontent, Tenev took to X on Monday to denounce the SEC’s “continued assault on crypto.” He characterised the regulatory actions as a part of a broader “regulatory onslaught” that, in his view, stifles innovation and handicaps American corporations and traders.
In line with the submitting, the SEC’s investigation into Robinhood’s crypto enterprise, together with its cryptocurrency listings, custody, and platform operations, has prompted issues about attainable violations of Sections 15(a) and 17A of the Securities Trade Act of 1934.
The potential enforcement motion towards Robinhood might contain civil injunctive measures, public administrative proceedings, and cease-and-desist proceedings, searching for treatments comparable to injunctions, disgorgement, civil cash penalties, and exercise limitations.
Over the past three years, we’ve reached a state of regulatory onslaught that’s dangerous to American corporations and shoppers. The SEC’s continued assault on crypto, coupled with latest rule proposals just like the one associated to predictive knowledge analytics, mark one more improper…
— Vlad Tenev (@vladtenev) May 6, 2024
Following the SEC’s lawsuits towards Binance and Coinbase final yr, Robinhood Crypto took additional steps to adjust to regulatory scrutiny. It ceased assist for tokens that the SEC deemed to be securities, ensuing within the lack of buying and selling entry for its U.S. customers to altcoins comparable to Cardano (ADA), Polygon (MATIC), and Solana (SOL) inside a number of weeks.
Dan Gallagher, Robinhood’s chief authorized, compliance, and company affairs officer, expressed disappointment with the SEC’s resolution.
“After years of excellent religion makes an attempt to work with the SEC for regulatory readability, together with our well-known try and ‘are available in and register,’ we’re disenchanted that the company has determined to situation a Wells Discover associated to our U.S. crypto enterprise,” mentioned Gallagher. “We firmly consider that the belongings listed on our platform are usually not securities, and we look ahead to partaking with the SEC to clarify simply how weak any case towards Robinhood Crypto could be based mostly on each the details and the regulation.”
Whereas we try to keep up optimistic and productive relationships with our regulators, if crucial we’ll use our assets to contest this matter within the courts, with the intent of each defending our crypto enterprise and establishing regulatory readability in america for…
— Vlad Tenev (@vladtenev) May 6, 2024
Tenev mentioned Robinhood Crypto isn’t afraid of a court battle to contest the matter with the SEC.
SEC’s Scrutiny of Robinhood Crypto Marks a Broader Crackdown on the Trade
The SEC’s scrutiny of Robinhood Crypto comes amidst a broader crackdown on the crypto trade, with notable warnings issued to different outstanding gamers like Consensys and Uniswap Labs.
In an April announcement, Uniswap’s founder, Hayden Adams, criticized the SEC’s strategy.
“It’s been clear for some time that moderately than working to create clear, knowledgeable guidelines, the SEC has determined to concentrate on attacking long-time good actors like Uniswap and Coinbase,” mentioned Adams.
Consensys, alternatively, opted to take authorized motion towards the SEC, expressing issues that regulating ether as a safety would hurt the U.S.’s capability to make the most of Ethereum and different blockchain applied sciences.
Robinhood Crypto has confronted regulatory challenges, together with a $30 million settlement with the New York Division of Monetary Companies in 2022 over compliance failures associated to cybersecurity and transaction monitoring.
Moreover, the corporate agreed to pay $65 million in 2020 to settle SEC prices of deceptive statements to traders and a $70 million superb from the Monetary Trade Regulatory Authority in 2021 for buyer hurt, marking its largest-ever monetary penalty.
