- 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 “Wells Notice” 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 Crypto’s 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 SEC’s move, noting that the company was ready to demonstrate how weak any case brought by the regulator against Robinhood Crypto would be on “both the facts and the law.”
“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,” 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 SEC’s call and “attempted to register a special purpose broker-dealer.”
Per the statement, the SEC’s move doesn’t affect user accounts or services on Robinhood Crypto.
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Read why Michael Saylor’s 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
