Retail trading platform Robinhood Markets announced on Monday that it received an enforcement action notice from the Securities and Exchange Commission on May 4 over crypto tokens traded on its platform.
The company said it had received a so-called “wells notice,” which the SEC issues when it plans to take enforcement action against a company. Such notifications do not necessarily mean that the company has committed any wrongdoing.
“We strongly believe that the assets listed on our platform are not securities, and we look forward to working with the SEC to clarify how weak the case against Robinhood Crypto is. ” said Dan Gallagher, Head of Legal, Compliance and Corporate Affairs. Robin Hood said.
The SEC has taken a hard line against the digital currency industry, insisting that most crypto tokens are securities and subject to registration rules, while accusing crypto companies of overreach. Regulators declined to comment on the enforcement action notice.
Coinbase, the world’s largest publicly traded cryptocurrency exchange, has previously argued that crypto assets are different from stocks and bonds and do not meet the definition of securities held by most of the crypto industry.
The SEC is in a legal battle against Coinbase. Last year, the cryptocurrency exchange facilitated trading in at least 13 virtual currency tokens that should be registered as securities, and illegally operated as a national stock exchange, broker, or clearing house without registering with regulators. Stated.
Robinhood Crypto allows customers to deposit and withdraw cryptocurrencies to and from custodial platforms, as well as route customer orders to liquidity providers based on lowest price. The company has been trying to register with the SEC for nearly two years.
Last year, the company removed digital tokens Solana, Cardano, and Polygon from its platform.
