Robinhood says SEC could pursue enforcement actions over its crypto operations, shares fall 2% – CNBC

“Despite years of good faith efforts to work with the SEC for regulatory clarity, including our well-known ‘come and register’ efforts, the SEC “We are disappointed in the decision to issue a Wells notice related to our U.S. cryptocurrency operations,” Dan Gallagher, Robinhood’s chief legal, compliance and corporate affairs officer, said in a blog post.

“We strongly believe that the assets listed on our platform are not securities, and we are committed to working with the SEC to clarify how weak the case against Robinhood Crypto is, both in fact and in law. I’m looking forward to it.”

The company’s stock price had recently risen 1%.

Robinhood disclosed in February that it had received a subpoena from the SEC in connection with its cryptocurrency business, specifically its cryptocurrency listing, custody, and platform operations. The SEC now has reason to suggest that Robinhood is violating securities laws, according to Monday’s filing.

“May 4, 2024, [Robinhood Crypto] Received a “Notice of Wells” from SEC staff…Staff issued a “preliminary notice” to RHC recommending that the SEC file an enforcement action against RHC alleging violations of Sections 15(a) and 17A. He said he had notified them that he had made a decision. Securities Exchange Act of 1934, as amended,” the filing states.

“Potential litigation may include civil injunction actions, public administrative proceedings, and/or cease-and-desist proceedings, including injunctions, cease-and-desist orders, disgorgement, prejudgment interests, civil actions, etc. Remedies may be sought: monetary penalties, as well as censure, revocation, and restriction of activities.”

Robinhood is scheduled to report its quarterly results on Wednesday.