The United States Securities and Exchange Commission (SEC) has issued a Wells Notice to Robinhood, the popular trading platform. Following this announcement, Robinhood's (HOOD) share price dropped by 2.5% in pre-market trading, reaching $17.95 as of 12:50 pm UTC on May 4, as per court filings.
The Wells notice indicates the conclusion of the SEC's investigation into Robinhood's U.S.-based crypto business.
The SEC has reportedly investigated Robinhood's cryptocurrency listings and custodian operations, and it has preliminarily recommended filing an enforcement action for alleged securities violations.
Despite Robinhood's efforts to register with the SEC, the issuance of the Wells Notice has disappointed the company. Dan Gallagher, Robinhood Markets' chief legal, compliance, and corporate affairs officer, expressed disappointment in a blog post dated May 6. He highlighted the company's attempts to cooperate with the SEC for regulatory clarity, including efforts to register.
Gallagher emphasized Robinhood's belief that the assets listed on its platform are not securities.
The company looks forward to engaging with the SEC to demonstrate the weakness of any case against Robinhood Crypto based on both factual and legal grounds.
May 2024, Cryptoniteuae