US-based digital trading app Robinhood’s crypto division has been issued a Wells Notice by the US Securities and Exchange Commission (SEC) on May 4. The Commission staff, led by Gary Gensler, has been investigating Robinhood’s cryptocurrency listings, custody of cryptocurrencies, and platform operations prior to recommending an enforcement action.
In a filing on May 8, Dan Gallagher, the chief legal officer at Robinhood Markets, expressed disappointment with the SEC after unsuccessful attempts to register with the regulator. He believes the assets listed on their platform are not securities and looks forward to clarifying this position with the SEC.
This action against Robinhood is part of the SEC’s continued scrutiny of crypto-related entities. Last month, Uniswap and Consensys also received a Wells Notice from the SEC, with Uniswap’s founder criticizing the regulator’s approach. Some in the crypto community have criticized the SEC for what they see as an abuse of the Wells process as a “scare tactic” against companies.
It seems the SEC’s regulatory actions are facing backlash from crypto stakeholders who argue that these efforts are aimed at stifling new crypto startups. Critics claim that Gensler’s focus is on making headlines rather than winning cases, suggesting political motives behind the SEC’s actions in the crypto space.
