Popular low-cost brokerage platform Robinhood (HOOD) has announced that the U.S. Securities and Exchange Commission (SEC) has concluded its investigation into its cryptocurrency trading platform, Robinhood Crypto, without pursuing any enforcement action.
The news marks a significant victory for the popular brokerage app, which had been under scrutiny after receiving a Wells Notice from the SEC’s Enforcement Division in May, signalling an impending enforcement action.
In a statement, the company confirmed the SEC’s decision, stating the division advised it that it “had concluded its investigation and did not intend to move forward with an enforcement action.”
Robinhood’s Head of Legal and Compliance, Dan Gallagher, didn’t mince words, declaring the investigation was unwarranted from the outset. “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,” he said in the company’s release.
The company further seized the opportunity to advocate for a shift in regulatory approach, urging the SEC to move away from “regulation by enforcement” and towards establishing clear rules for the burgeoning digital asset market.
“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 company, which has been eyeing crypto futures offerings, wrote.
SEC Drops Robinhood Investigation Amid Attitute Change
The SEC’s decision on Robinhood Crypto aligns with a perceived shift in the agency’s approach to cryptocurrency regulation under the current administration. The regulator has recently made similar move, closing its investigation into non-fungible token market place OpenSea.
It has also moved to reach a deal with the Nasdaq-listed cryptocurrency exchange Coinbase, which it has been locked in legal battles with for years over its “regulation by enforcement” approach.
