(Bloomberg) — Robinhood Markets Inc. said the US Securities and Exchange Commission closed an investigation into the firm’s cryptocurrency operations and isn’t pursuing any enforcement action.
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Robinhood disclosed last year that it received what’s known as a Wells notice, indicating the SEC had initially determined to recommend an enforcement action.
“Let me be crystal clear — this investigation never should have been opened. Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities,” Dan Gallagher, Robinhood’s chief legal, compliance and corporate affairs officer, said in a statement Monday. “As we explained to the SEC, any case against Robinhood Crypto would have failed.”
The SEC declined to comment.
Robinhood is the latest company to announce the SEC has retreated from a crypto enforcement action or lawsuit as the agency shifts to new leadership and takes a friendlier approach to the market. On Friday, Coinbase Global Inc. said the SEC agreed to drop its lawsuit accusing the largest US cryptocurrency trading platform of operating an illegal exchange. Earlier this month, the regulator put a similar case against Binance on hold.
Robinhood has been swiftly expanding its consumer-finance services beyond its trademark retail-investing platform, including in the crypto space. It has a credit card and retirement products, and has entered international markets, most recently announcing an expansion into Asia.
The firm “has long disagreed with the argument” that most digital-asset transactions are subject to federal securities law, it said in the statement, and Robinhood “made difficult choices not to provide certain products and services” that former SEC Chair Gary Gensler, who served under President Joe Biden, claimed were securities.
“Instead of regulation by enforcement, it’s time for the SEC to turn to regulation by regulation — providing market participants with clarity and an appropriate regulatory framework for digital assets,” the Menlo Park, California-based company said.
Last month, Robinhood agreed to pay $45 million to settle separate allegations with the SEC.
–With assistance from Nicola M White.
(Updates with SEC declining to comment in fourth paragraph, other probes in fifth.)
