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The digital assets industry received an utter shock on Monday as Robinhood Markets Inc. (HOOD) received a Wells Notice from the US Securities and Exchange Commission (SEC). Reports reveal that the <a href="https://news.todayq.com/ripple-cto-skeptic-about-robinhood-token-heres-why/" rel="noopener noreferrer nofollow">crypto exchange</a> got the warning letter on May 4.&nbsp; Robinhood stands strong 
The regulator’s move comes in with the recommendations from SEC staff to file a lawsuit against Robinhood. It has alleged potential violations of the Securities Exchange Act. The alleged securities violations related to its cryptocurrency listings, custody practices, and platform operations.
Data shows that Robinhood Markets (NASDAQ: HOOD) share price dropped by over 2% in the pre market trading session. However, Robinhood price took a jump of more than 2% as soon as the market opened for trading. HOOD is trading at an average price of $18.34, at the press time. Its price has jumped by 90% over the last 6 months.
It is important to note that the potential enforcement action could involve various measures. This includes civil injunctive actions, public administrative proceedings, and cease and desist orders with others.
According to reports, Robinhood has shown its disappointment with the SEC’s stance. It had highlighted its belief that the assets listed on its platform are not securities.
Dan Gallagher, Robinhood’s Chief Legal, Compliance, and Corporate Affairs Officer voiced the company’s will power to contest the SEC’s allegations. He asserted that Robinhood had made “difficult choices” linked to the tokens or products the commission identified as securities in previous actions. Gallagher is also a former SEC commissioner. What’s next? 
Wells Notices comes before enforcement actions launched by the SEC. This signals the regulator’s intention to pursue legal measures against the company.&nbsp;
Robinhood had mentioned that the range of remedies sought by the SEC, including injunctions, disgorgement, civil penalties, and limitations on activities.
The company’s decision to discontinue support for certain tokens, including Cardano (ADA), Polygon (MATIC), and Solana (SOL) showed its efforts to navigate regulatory challenges. These tokens were named as securities in SEC lawsuits against other platforms, prompting Robinhood to cease their support.
As of now, Robinhood Crypto supports buying and selling, Aave (AAVE), Avalanche (AVAX), Bitcoin (BTC), Bitcoin Cash (BCH), Chainlink (LINK), Compound (COMP), Dogecoin (DOGE), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Shiba Inu (SHIB) and more.

SEC takes aim at Robinhood, faces lawsuit threat

Todayq News

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