After Uniswap and Consensys! Robinhood also receives SEC's Wells Notice

Robinhood Crypto, the encryption arm of Robinhood, an American online brokerage, received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) on May 4. This is the third encryption-related company to receive this notice, following Uniswap and Consensys in April. It also indicates that SEC staff have made a preliminary decision to take enforcement action against the company, accusing it of violating securities regulations.

SEC charges Robinhood with securities violations

Robinhood said in a statement that SEC staff has made a preliminary decision to recommend enforcement action against the crypto unit, charging it with securities violations.

Dan Gallagher, Robinhood Markets’ chief of legal, compliance and corporate affairs, said: “We have tried in good faith to work with the SEC for years to increase regulatory transparency, but we are dismayed by the agency’s decision to issue an announcement related to our U.S. crypto business. Wells informed was disappointed.

Robinhood received an SEC subpoena shortly after cryptocurrency exchange FTX filed for bankruptcy in November 2022. The subpoena seeks to provide information on topics such as "cryptocurrency inventory, cryptocurrency custody and platform operations."

Robinhood Crypto has since made a number of concessions, including not listing certain tokens or offering products such as lending and staking (the SEC has said these tokens are securities in public actions against other platforms). In addition, Robinhood is also trying to register a special purpose broker-dealer with the SEC.

Uniswap and Consensys have also recently received Wells Notices

Last month, decentralized cryptocurrency exchange Uniswap received a Wells Notice from the SEC. Uniswap founder Hayden Adams expressed disappointment at the time: Rather than committing to clear, informed rules, the SEC decided to focus on attacking long-term good players like Uniswap and Coinbase, while letting bad guys like FTX slip away.

Ethereum infrastructure developer Consensys also received the SEC’s Wells Notice in April and decided to take the initiative to sue the SEC. The indictment also found that the SEC has been investigating MetaMask, a product of Consensys, for many years. Consensys said that regulating Ethereum as a security would jeopardize the ability of the United States to use Ethereum and other blockchains. If the value and belief of Ethereum based on a decentralized platform are destroyed, this may lead to a catastrophe in the U.S. encryption industry. Large-scale layoffs.

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