By Emma Roth , a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and ed

Robinhood’s crypto arm receives SEC warning over alleged securities violations

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2024-05-06 14:30:03

By Emma Roth , a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.

Robinhood’s cryptocurrency division could soon be in trouble with the Securities and Exchange Commission. In an 8-K filing submitted on Saturday, Robinhood revealed that it received a Wells notice from the SEC’s staff recommending the agency take action against the trading platform for alleged securities violations.

Robinhood says it received the Wells notice after cooperating with the SEC’s requests for investigative subpoenas about its crypto listings, custody of cryptocurrencies, and the platform’s operations. A Well notice is a letter from the SEC that warns a company of a potential enforcement action. The SEC’s response could include an injunction, a cease-and-desist order, disgorgement, limits on activities, and / or civil penalties.

Coinbase similarly received a Wells notice just months before the SEC sued it for breaking securities law. The SEC also sued Binance on similar grounds, with the trading platform’s former CEO, Changpeng Zhao, now facing four months in prison.