Wells Notice To Robinhood For Crypto Business, Expects Enforcement

(CTN News) – As part of its announcement on Monday, Robinhood (NASDAQ:HOOD) announced that its Robinhood Crypto LLC unit has received a Wells Notice from their regulatory staff, indicating that the staff will be recommending that the Securities and Exchange Commission take enforcement action against Crypto LLC.

In more formal terms, Crypto has received investigation subpoenas from the SEC regarding, among other topics, its cryptocurrency listings, custody of cryptocurrencies, and platform operations, which are the subject of the investigation.

According to Robinhood, it’s cooperating with the authorities.

It is stated that the Staff of the Securities and Exchange Commission has informed the Commission that they have made a preliminary determination that they will recommend that the SEC file an enforcement action against Robinhood Crypto, alleging violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934.

Various remedies may be sought in an action against the defendant, including an injunction, a public administrative proceeding, or cease-and-desist order, as well as disgorgement, interest on pre-judgment, civil money penalties, censure, revocation, and restrictions on the defendant’s activities.

It was announced today that Dan Gallagher has been appointed to the position of Chief Legal, Compliance, and Corporate Affairs Officer at Robinhood.

Following SEC actions against previous platforms, Crypto has made the difficult decision not to list certain tokens or provide certain services, such as lending and staking, alleged by the SEC to be securities.

Additionally, Robinhood stated that it had heeded the SEC’s calls and had attempted to register with the SEC as a special purpose broker-dealer.

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