May 8, 2024
By Anjali Kochhar
The Securities and Exchange Commission (SEC) is preparing to take action against Robinhood Markets, Inc., according to a recent filing by the trading platform. The SEC’s attention is on Robinhood’s cryptocurrency operations, with a warning sent over the weekend hinting potential charges once the investigations are completed.
Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer, expressed disappointment with the SEC’s issuance of a Wells Notice regarding the firm’s U.S. crypto business. He emphasized Robinhood’s cooperation with the SEC for regulatory clarity and readiness to contest any allegations, reaffirming their belief that assets on their platform are not securities.
The SEC’s investigation into Robinhood is not new; earlier this year, the commission subpoenaed the business over its cryptocurrency listings, platform operations, and custody policies. The SEC now suggests probable violations of securities law, along with remedies such as civil injunctions, administrative procedures, and penalties.
Despite regulatory challenges, analysts had previously projected growth for Robinhood stock, citing robust transaction revenue. Over the past year, Robinhood Markets stock has surged by over 102%. Investors seeking exposure to Robinhood can consider avenues such as the ARK Next Generation Internet ETF (ARKW) and the ARK Fintech Innovation ETF (ARKF).
Robinhood shares increased 0.22% on Monday, closing at $17.99. As the SEC’s investigation continues, market participants will keep a close eye on developments in Robinhood’s regulatory landscape, which might have repercussions for the broader fintech sector.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
