FX.co ★ SEC Staff To Recommend The SEC To File Enforcement Action Against Robinhood Crypto

Robinhood Markets, Inc., a well-known securities trading platform, has disclosed that Robinhood Crypto LLC, a subset of its operations focused on cryptocurrency, has received a "Wells Notice" from the United States Securities and Exchange Commission. This administrative warning informs Robinhood Crypto that it may be subject to a law enforcement proceeding due to alleged violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934.

The potential consequences include a civil antitrust lawsuit, a public administrative process, and/or a halt-and-abandon command that could involve actions such as a formal court order (injunction), repayment of questionable gains (disgorgement), imposition of civil financial penalties, and a reprimand. It could also result in the revocation of permissions and restrictions on Robinhood Crypto's activities.

The notice comes after the SEC issued investigative subpoenas related to Robinhood Crypto’s listing of cryptocurrencies, the custody of these digital assets, and the operation of its platform. Robinhood Crypto has been collaborating with the SEC throughout the investigation.