2024

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The Securities and Exchange Commission (SEC) filed a Wells Notice against Robinhood’s crypto arm on May 6, indicating its intention to take enforcement action against the company.
The regulator has accused <a href="https://insidebitcoins.com/news/robinhood-trading-app-takes-on-coinbases-market-dominance-as-regulatory-pressure-intensifies" rel="noopener noreferrer nofollow">Robinhood</a> Crypto of securities violations under “Sections 15(a) and 17A of the Securities Exchange Act of 1934,” according to a <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001783879/b2282418-56e4-426d-aff6-761967847c9c.pdf" rel="noopener noreferrer nofollow">filing</a>.
<img decoding="async" src="https://www.investopedia.com/thmb/6ElVwVFOFi-o_6VFW2akrPPLcU8=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/robinhood-5bfc3b9cc9e77c00519ed9f1.jpg" alt="Is Robinhood Safe for Investors?">
<h2 id="span-style-font-weight-400-robinhood-disappointed-says-sec-case-is-weak-span">Robinhood “Disappointed,” Says SEC Case Is “Weak”</h2>
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” said Dan Gallagher, Robinhood’s legal, compliance and corporate lead, in a May 6 <a href="https://newsroom.aboutrobinhood.com/robinhood-response-to-receipt-of-wells-notice-from-the-u-s-securities-and-exchange-commission/" rel="noopener noreferrer nofollow">statement</a>.&nbsp;
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Robinhood Chief Legal Officer Dan Gallagher on the 🇺🇸 SEC wells notice:
 “After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells… <a href="https://t.co/61WXTPogVI" rel="noopener noreferrer nofollow">pic.twitter.com/61WXTPogVI</a>
 — Lior 🇺🇸 🇮🇱 (@liorsela) <a href="https://twitter.com/liorsela/status/1787544165263311006?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">May 6, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
“We firmly believe that the assets listed on our platform are not securities, “ he added. Gallagher said he looks forward to engaging with the SEC to show the regulator “how weak any case against Robinhood Crypto would be on both the facts and the law.”
<h2 id="span-style-font-weight-400-sec-floods-the-crypto-sector-with-wells-notices-span">SEC Floods The Crypto Sector With Wells Notices</h2>
Wells Notices are preliminary warnings sent to companies. They inform firms that the SEC believes it has enough information to bring an action against a company.&nbsp;
Robinhood becomes the latest crypto firm to receive such a notice this year. MetaMask Wallet developer, Consensys, and decentralized exchange, Uniswap, have disclosed that they also received Wells Notices from the SEC during the last month.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 Today, Consensys took an important step towards preserving access to ether and by extension the Ethereum blockchain in the U.S. We are suing the SEC and fighting back against its overzealous regulatory overreach. You can find more of my thoughts here: <a href="https://t.co/VmvOsrCxjw" rel="noopener noreferrer nofollow">https://t.co/VmvOsrCxjw</a>… <a href="https://t.co/5IubZo69FW" rel="noopener noreferrer nofollow">https://t.co/5IubZo69FW</a>
 — Joseph Lubin (@ethereumJoseph) <a href="https://twitter.com/ethereumJoseph/status/1783562422571192695?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">April 25, 2024</a>
</blockquote>
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Consensys went on the offensive and sued the regulator last month regarding the SEC’s categorization of Ethereum. It accused the SEC of an “<a href="https://insidebitcoins.com/news/consensys-sues-the-sec-to-prevent-it-arbitrarily-expanding-its-jurisdiction-over-ethereum" rel="noopener noreferrer nofollow">unlawful power grab</a>” in regulating the leading crypto as a security.
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Robinhood Crypto Arm Is The Latest To Get A Wells Notice From The SEC

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