The U.S. Securities and Exchange Commission (SEC) has notified Robinhood Crypto, the trading platform, that it plans to take legal action against them. The SEC issued a Wells Notice, which is a warning that legal action is imminent, but does not imply any wrongdoing on the part of Robinhood Crypto. According to Dan Gallagher, the chief legal, compliance, and corporate affairs officer at Robinhood Markets, Inc., the company’s crypto trading arm has not violated any regulations. He expressed disappointment that the SEC has decided to issue the Wells Notice, despite their efforts to work with the agency for regulatory clarity. Robinhood Crypto believes that the assets listed on their platform are not securities and they are prepared to engage with the SEC to demonstrate the weakness of any case against them. The SEC has been involved in a legal battle with Coinbase, the world’s largest publicly traded crypto exchange, since last year. They have also brought similar charges against Binance, the largest crypto exchange by trading volume. According to crypto legal expert Jake Chervinsky, the SEC may be using the Wells notice as a scare tactic, which raises questions about their adherence to the law and their mandate.
