Robinhood Crypto, the digital asset arm of the popular stock trading app, announced on Monday that it had received a wells notice from the Securities and Exchange Commission (SEC).
“We strongly believe that the assets listed on our platform are not securities,” Dan Gallagher, Robinhood Markets' chief legal, compliance and corporate affairs officer, said in a statement. “We look forward to working with the SEC to clarify how weak the case against Robinhood Crypto is from both a factual and legal standpoint.”
Following enforcement actions against Coinbase and Kraken, Robinhood Crypto finds itself the latest US company in the SEC's crosshairs that provides digital asset services to its customers. Robinhood warned in a filing Friday that the SEC's recommendation for enforcement action against Robinhood is related to an investigative subpoena it previously received.
While most exchanges offer a myriad of digital assets to their customers, Robinhood Crypto's offering is relatively limited. It varies by state, but in New York, Robinhood Crypto offers investors the ability to buy and sell 15 different cryptocurrencies.
Robinhood Crypto's Wells notice comes amid a growing number of regulatory warnings issued by the SEC to U.S. crypto companies.mirror string A legal salvo was fired a year ago.the Commission recently sent a Wells Notice to the Ethereum software giant consensus—The company that developed the popular wallet metamask-and uniswap labthe maker of the most popular decentralized exchange for cryptocurrencies.
Using a service called Robinhood Connect, MetaMask users in the United States can Funding a self-custodial wallet by debit card, bank transfer, or using your existing February Robinhood balance. The same service is also available to users of Uniswap's mobile app. announced By Uniswap Labs last week.
The price of the native UNI token has changed after Uniswap Labs received the Wells Notice. plummeted last month.Among the tokens offered by Robinhood in the United States, UNI is listed Last July.
Previous investigative subpoenas received by Robinhood focused on the company's cryptocurrency listings, as well as its custody practices regarding how it stores customer assets.in filingthe company said SEC action could extend to civil litigation and a cease-and-desist.
Last June, Robinhood Crypto moved To reduce cryptocurrency offerings following enforcement actions against Coinbase and Binance. Within weeks, the company's US users lost access to trading on Cardano (ADA), Polygon (MATIC), and Solana (SOL).
The tokens dropped by Robinhood Crypto are said to be securities, which is a key part of the SEC's allegation that some U.S. crypto exchanges are in violation.So-called howie testthe regulator argued that some token sales constituted investment contracts.
Wall Street's top regulator has also taken issue with the fact that some U.S. crypto companies are allegedly offering key services through self-custodial wallets.Last August, Robinhood expanded Robinhood Wallet program that allows users to dive into decentralized finance through Ethereum swaps.
For Robinhood's European customers, investors have access to up to 30 different cryptocurrencies. In the US, Robinhood's cryptocurrency expansion began in 2018 with Bitcoin and Ethereum offerings.
Since then, the company's crypto services have expanded, but Robinhood Crypto's then-COO Said The 2021 listing process was unique compared to our competitors. Robinhood is a “safety-first company.” Christine Hall He added: “We want to work on really evaluating everything from a regulatory perspective.”
Editing: Stacey Elliott and Andrew Hayward
Editor's note: This article was updated with additional details after publication.
