SEC ends investigation into Robinhood crypto

The US Securities and Exchange Commission told Robinhood Crypto on February 21 that it was officially closing the investigation it opened against the company.

The SEC Enforcement Division sent Robinhood Crypto a letter confirming the closure and saying no further enforcement actions would take place, according to a statement released by Robinhood’s Chief Legal Officer, Dan Gallagher, who said he supported the SEC’s decision to drop the investigation, arguing it shouldn’t have started in the first place.

SEC did not have a case against Robinhood Crypto

Dan claimed Robinhood Crypto always stuck to federal securities laws and never allowed any securities transactions on its crypto platform. He insisted the SEC would have lost if it had taken Robinhood to court.

“As we explained to the SEC, any case against Robinhood Crypto would have failed. We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC,” Dan said.

In May 2024, Robinhood received a notice warning that it could be charged for potential violation of securities law within its crypto unit after previously being subpoenaed for its cryptocurrency listings, custody, and platform operations – despite “years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’” Dan said at the time.

At the time, the SEC, under former chairman Gary Gensler, accused many crypto companies of violating securities laws by letting people trade digital tokens without registering them as securities.

Robinhood made tough calls, turning down popular products and crypto services other exchanges openly offered, to avoid SEC trouble.

In Robinhood’s statement after the investigation ended, Dan added the company wants clearer crypto rules going forward. He said Robinhood supports regulation through official guidelines, not enforcement actions after companies already built products.

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