The United States Securities and Exchange Commission closed its investigation into Robinhood Crypto less than a year after issuing the online brokerage a Wells notice.
The SEC’s Enforcement Division informed Robinhood on Feb. 21 that it had concluded its investigation and would not recommend any enforcement action. Robinhood disclosed this information in a Feb. 24 announcement.
“[T]his investigation never should have been opened,” said Dan Gallagher, Robinhood Markets’ compliance and corporate affairs officer. “Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities.”
Securities regulators had been investigating Robinhood’s cryptocurrency operations for the better part of a year. As Cointelegraph reported, Robinhood’s US-based crypto business was subject to an SEC Wells notice on May 4, 2024. At the time, the SEC made a “preliminary determination” to recommend enforcement actions tied to alleged securities violations.
Last month, Robinhood reached a $45-million settlement with the SEC over accusations that it violated more than 10 securities laws. The Jan. 13 order concluded that Robinhood entities “admitted to certain findings” put forward by the SEC.
An excerpt of the SEC’s order against Robinhood dated Jan. 13, 2025. Source: SEC
In closing the chapter on the SEC investigation, Robinhood urged the regulator to drop its “regulation by enforcement” posture and provide the industry with clearer guidelines for digital assets, a view that’s widely shared by market participants.
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SEC signals shift in its approach to crypto
President Donald Trump’s administration has signaled major policy shifts ahead for cryptocurrencies. Shortly after Trump took office on Jan. 20, the SEC launched a Crypto Task Force dedicated to bringing regulatory reform to the industry.
The new task force is being led by the pro-crypto SEC Commissioner Hester Peirce, who has vowed to clean up the “mess” made by former SEC chair Gary Gensler.
In addition to Robinhood, the SEC’s enforcement actions against industry players like Coinbase, Binance and Ripple may be dead in the water, according to former SEC official John Reed Stark.
Stark made this observation after the SEC requested a 28-day extension to answer Coinbase’s petition in its ongoing lawsuit against the exchange.
“Expect all crypto-related appeals, including the appeal of the Ripple matter, to pause or even more likely, to be fully withdrawn,” said Stark.
Source: John Reed Stark
Although the SEC’s Crypto Task Force has only been around just over a month, it has already met with representatives from the Blockchain Association, Jito Labs, Multicoin Capital, Nasdaq and Andreessen Horowitz to talk about its evolving priorities. The representatives also requested clearer regulatory frameworks for exchange-traded products, staking and other issues impacting the sector.
Related: Trump’s crypto ventures raise conflict of interest, insider trading questions