New York, United States – Robinhood Crypto, the division of the popular stock trading app dedicated to digital assets, revealed on Monday that it has been served with a Wells Notice from the Securities and Exchange Commission (SEC). Dan Gallagher, Robinhood Markets’ chief legal, compliance, and corporate affairs officer, expressed confidence in the non-securities status of the assets on their platform. Gallagher stated, “We look forward to engaging with the SEC to clarify the weak case against Robinhood Crypto both factually and legally.”
The SEC’s enforcement actions against Coinbase and Kraken have drawn attention to Robinhood Crypto as the latest U.S. firm under scrutiny for offering digital asset services. In a recent filing, Robinhood warned of the SEC’s potential enforcement action, which is linked to previous investigative subpoenas. While many exchanges provide a wide range of digital assets, Robinhood Crypto’s offerings are more limited and vary from state to state. For instance, investors in New York can purchase and sell 15 different cryptocurrencies.
The Wells Notice received by Robinhood Crypto comes at a time when the SEC has been issuing regulatory warnings to U.S. crypto firms. In a manner similar to legal actions taken a year ago, the Commission has sent Wells Notices to companies such as Consensys and Uniswap Labs. These notices are related to the firms’ compliance with regulations surrounding digital assets.
Last month, the price of Uniswap’s UNI token plummeted following the receipt of a Wells Notice by Uniswap Labs. Robinhood Crypto also faced investigative subpoenas related to its cryptocurrency listings and custody practices for customer assets. The company disclosed that the SEC’s actions could range from civil litigation to cease-and-desist orders.
Robinhood Crypto made adjustments to its cryptocurrency offerings last year after enforcement actions against Coinbase and Binance. The SEC has raised concerns about certain U.S. crypto firms allegedly offering services through self-custodial wallets. Robinhood, for example, expanded its Robinhood Wallet program to allow users to engage in decentralized finance through Ethereum swaps. European customers of Robinhood have access to up to 30 different cryptocurrencies compared to the limited offerings for U.S. customers.
Despite expanding its crypto offerings over the years, Robinhood Crypto maintained a cautious approach to listing tokens compared to its competitors. Christine Hall, the then-COO, emphasized the company’s commitment to regulatory compliance, stating, “We want to make sure that we’re working in assessing everything from a regulatory perspective really well.”