Robinhood’s cryptocurrency division has received a Wells notice from the Securities and Exchange Commission, signaling that the regulatory body is preparing for enforcement action.
In February, Robinhood revealed it had been served with subpoenas from the SEC concerning its cryptocurrency listings, custody, and overall operations. The recent Wells notice typically serves as a warning that the SEC has sufficient information to pursue enforcement measures.
Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer, expressed disappointment in a blog post, stating, “After years of good faith attempts to work with the SEC for regulatory clarity, including our well-known effort to ‘come in and register,’ we are disheartened by the agency’s decision to issue a Wells Notice regarding our US crypto business.”
Gallagher, a former SEC commissioner, insisted that the assets listed on their platform should not be classified as securities and emphasized the company’s eagerness to clarify the weaknesses of any potential case against Robinhood Crypto, both in terms of factual evidence and legal stance.
Robinhood also noted that it has already made significant decisions to avoid listing certain tokens and refrained from offering products like lending and staking, which the SEC has previously alleged to be securities in actions against other platforms. Recently, the company halted support for Cardano, Polygon, and Solana, which have been labeled as securities in SEC lawsuits against Binance and Coinbase.