Robinhood Says It Received SEC Subpoena Over Crypto Services Shortly After FTX Collapse

Robinhood Says It Received SEC Subpoena Over Crypto Services Shortly After FTX Collapse

  • Robinhood said the SEC wants to know more about its crypto services, including listings, crypto custody, and platform operations.
  • Robinhood said it might need to delist some cryptocurrencies if they’re deemed unregistered securities by the SEC.
  • Robinhood currently offers 18 cryptocurrencies.

Robinhood, a securities brokerage firm that also offers cryptocurrency services, has revealed that it’s been affected by the collapse of FTX late last year.

The company disclosed in a 10-K filing that it received a subpoena from the U.S. Securities and Exchange Commission (SEC) last December relating to its “cryptocurrency listings, custody of cryptocurrencies and platform operations.”

A subpoena is a formal written order to testify before a court or provide documents during an active investigation. Robinhood said it has also received a subpoena from the California Attorney General’s Office seeking information about its trading platform, business and operations, custody of customer assets, customer disclosures, and coin listings.

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Robinhood currently lists 18 cryptocurrencies, including bitcoin (BTC), ether (ETH), and dogecoin (DOGE). The company said that if the SEC deems some of the cryptocurrencies it supports securities, it might be forced to delist them.

“To the extent that the SEC or a court determines that any cryptocurrencies supported by our platform are securities, that determination could prevent us from continuing to facilitate trading of those cryptocurrencies (including ceasing support for such cryptocurrencies on our platform).”

The attention Robinhood is getting from the SEC and other institutions seems to be part of a wider regulatory crackdown on crypto in the U.S. Multiple other crypto-related companies have recently been impacted by the SEC’s decisions, including Kraken, Binance, and Paxos.

SEC’s Crackdown on Crypto Continues

The SEC has recently ramped up its regulatory war against crypto services companies.

For example, a few weeks ago, the SEC forced Kraken, one of the largest centralized crypto exchanges, to pay a $30 million fine and shut down its staking services because it sold unregistered securities.

On top of that, the SEC has also sued Paxos, the issuer of the Binance-branded stablecoin BUSD, and ordered the company to stop issuing the stablecoin because it’s an unregistered security.

There are also reports that the SEC, the DOJ, and other institutions are investigating Binance over potential money laundering offenses.

On the Flipside

  • There have yet to be any charges brought against Robinhood.

Why You Should Care

Robinhood is one of the most popular brokerages in the U.S. If the SEC deemed it sold unregistered securities, millions would lose access to the crypto market. Investors using Robinhood should consider following this story closely to make the best decision if Robinhood is forced to shut down crypto services.

Learn more about the SEC’s latest crackdown on crypto:

SEC to Sue Paxos Over BUSD, Ordered to Stop Issuance

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