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CryptoXTimes > Article > News > SEC Issues Warning to Robinhood Crypto Over Operations
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SEC Issues Warning to Robinhood Crypto Over Operations

SEC sends warning to Robinhood for crypto activities; action possible.

Sana Bukhari
Last updated: May 6, 2024 2:57 pm
Sana Bukhari 1 year ago
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SEC Issues Warning to Robinhood Crypto Over Operations

The U.S. Securities and Exchange Commission (SEC) has sent Robinhood Markets Inc. a Wells notice, which means that the SEC may take action against the company for its cryptocurrency activities.

In a regulatory filing on Monday, Robinhood said that the SEC’s staff had made a preliminary decision that Robinhood Crypto should be subject to legal action. Concerns have been raised about the platform’s cryptocurrency listings, custody methods, and operations.

SEC Potential Consequences, Legal Action

The filing lists possible consequences such as injunctions, cease-and-desist orders, disgorgement of earnings, and other penalties or operational limits. Robinhood said it had been served with a subpoena and has been supporting the SEC in its probe. 

A Wells notice allows companies to respond to the SEC’s claims before the official enforcement process starts. However, getting the warning does not always mean that regulatory action will be taken.

The increased regulatory scrutiny comes as U.S. authorities pay more attention to the cryptocurrency business, which is changing quickly. Laura Brookover, who used to work for the Commodity Futures Trading Commission (CFTC) and now works as a lawyer at Consensys, criticized the Securities and Exchange Commission focus and asked if more important securities violations needed attention.

When the Securities and Exchange Commission subpoena was made public, Robinhood’s stock dropped 5% right after the markets started at 9 a.m. EST.

ROBINHOOD TANKS 5% AFTER SEC ISSUED WELLS NOTICE RELATED TO U.S. CRYPTO BUSINESS$HOOD pic.twitter.com/MglAwy9Pzx

— Radar🚨 (@RadarHits) May 6, 2024

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TAGGED: Crypto, Cryptocurrencies, SEC
By Sana Bukhari
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Sana Ali is a crypto guru who writes helpful articles that reveal complicated ideas in a way that many people can understand. She knows much about blockchain's basic ideas and how it works.
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