Yesterday Robinhood announced it received a Wells Notice from the Securities and Exchange Commission (SEC) warning of impending legal action relating to crypto custody, cryptocurrency listings and platform operations. Although Robinhood is a registered broker-dealer for traditional securities, it plans to resist the SEC’s steps. The news follows Wells Notices, which were recently issued to Ethereum developer Consensys and automated market maker Uniswap. Last year the SEC filed lawsuits against Coinbase, Binance and others.
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” said Dan Gallagher, Chief Legal, Compliance and Corporate Affairs Officer, Robinhood Markets. “We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
During Congressional testimony last year Mr Gallagher outlined that it attempted to register in good faith, starting in late 2021. It spent a year and a half with more than a dozen meetings and calls with the SEC. It made a written request for relief for a registered special purpose broker-dealer to support both digital asset commodities and securities. “We have unfortunately not been able to make any progress with the Commission on our request for relief to register,” said Mr Gallagher in July last year. However, it said it continued to engage with the SEC.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
