Robinhood Crypto has obtained a Wells discover from the SEC, based on a Monday disclosure.
Robinhood, based on an 8K disclosure, mentioned that the US securities regulator had probed “among other topics, RHC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations.”
The corporate obtained the discover Friday. The SEC makes use of Wells notices to tell investigation topics about pending enforcement actions.
Based on Robinhood, the inventory and crypto buying and selling app firm faces an enforcement motion stemming from alleged violations of the Securities Alternate Act.
“The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities,” Robinhood mentioned.
The corporate mentioned it had cooperated with the SEC’s investigation up to now.
“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,” Dan Gallagher, Robinhood’s chief authorized and compliance officer mentioned in an announcement.
“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,” Gallagher continued.
A spokesperson for the SEC informed Blockworks that the regulatory doesn’t remark “on the existence of nonexistence of a possible investigation.”
The agency is ready to announce earnings on Wednesday.
Robinhood’s reveal represents the most recent Wells discover issued by the SEC to a agency that does enterprise in crypto. Final month, Uniswap mentioned it was served a Wells discover.
The corporate has beforehand disclosed subpoenas probing its crypto merchandise, based on a 2022 submitting with the SEC.
“In connection with the Early 2021 Trading Restrictions, we and our employees, including our co-founder and CEO, Vladimir Tenev, have received requests for information, and in some cases, subpoenas and requests for testimony” from varied authorities companies, together with the SEC, the submitting mentioned.
The agency was additionally charged with “repeated misstatements” about income sources, which resulted in Robinhood paying $65 million to settle with the SEC.
In 2022, the corporate’s crypto section was accused of anti-money laundering and shopper protections violations by the New York Division of Monetary Companies. It ended up paying a $30 million penalty.
Consensys was additionally allegedly served with a Wells discover, based on a swimsuit it filed towards the SEC in a Texas courtroom.
Each Uniswap and Consensys have come out towards the SEC, with the latter saying that its discover represented the “latest example of aggressive SEC regulatory overreach.”
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