- The U.S. SEC has signaled a possible crypto enforcement action.
- The regulator recently issued a Wells Notice to a crypto firm.
- The company received the notice with discontentment.
Robinhood Markets announced Monday that the U.S Securities and Exchange Commission (SEC) had issued its crypto unit with a Wells Notice on May 4.
A โWells Noticeโ is a formal letter sent by a securities regulator to a respondent informing them of the charges or enforcement action the agency intends to take against them. Typically, a Wells Notice gives the recipient the opportunity to respond to the letter’s contents in a written statement.
Robinhood Cryptoโs Well Notice from SEC
According to a statement dated May 6, Robinhood Crypto (RHC) has received a Wells Notice from the SEC staff indicating that they would advise the commission to file an enforcement action against the entity based on alleged securities violations.
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Robinhood Markets compliance chief and Corporate Affairs Officer Dan Gallagher expressed discontentment with the SECโs move, noting that the company was ready to demonstrate how weak any case brought by the regulator against Robinhood Crypto would be on โboth the facts and the law.โ
โAfter years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to โcome in and register,โ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,โ Gallagher stated.
In defense, Robinhood Crypto said that it has often made difficult decisions to avoid listing tokens or crypto products that the SEC previously alleged are securities in public actions against other platforms. The company said it also heeded the SECโs call and โattempted to register a special purpose broker-dealer.โ
Per the statement, the SECโs move doesnโt affect user accounts or services on Robinhood Crypto.
Read why Michael Saylorโs speculation that the SEC will flag ETH, ADA, and SOL as securities:
Michael Saylor Warns SEC to Flag ETH, ADA, SOL as Securities
Stay updated on the Philippines SEC plan to regulate crypto:
Philippines Eyes Crypto Regulation Guidelines by Year-End