The United States and Exchange Commission has dropped its probe into Robinhood Crypto, the cryptocurrency unit of the popular financial services company, less than a year after issuing the company with a Wells notice notifying it of imminent enforcement action.
SEC Does Not Plan To Bring Any Enforcement Action Against Robinhood
The SEC’s Enforcement Division told Robinhood Crypto that “it had concluded its investigation and did not intend to move forward with an enforcement action.” Robinhood revealed this information in a statement today.
Robinhood Markets’ compliance and corporate affairs head, Dan Gallagher, argued that “this investigation should never have been opened,” asserting that the company “always respects federal securities laws and never allowed transactions in securities.”
On May 4, 2024, the SEC issued a Wells notice to Robinhood Crypto, suggesting that it would recommend pursuing enforcement action. At the time, the SEC made a “preliminary determination” to recommend action against the company for alleged securities violations.
“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,” Gallagher said in the statement.
In January, Robinhood reached a $45 million settlement with the SEC over accusations that it broke over 10 securities laws. As per the settlement, Robinhood “admitted to certain findings” brought forward by the regulator.
A Turning Point For US Crypto Regulation
President Donald Trump’s administration has undertaken major policy transformations for the crypto market. Shortly after Trump took office on Jan. 20, the SEC rescinded earlier accounting guidance and formed a crypto task force focused on formulating a new regulatory framework.
Additionally, President Trump signed an executive order on Jan. 23, 2025, intended to create regulatory clarity for digital assets and fortify the US’s position as the world’s leader in the digital asset economy.
The closing of the SEC’s Robinhood probe echoes what the industry has witnessed in several such cases in recent times. Last Friday, the agency ended its investigation into NFT marketplace OpenSea, just hours after agreeing in principle to dismiss its charges against crypto exchange Coinbase — which marked a major legal victory for the exchange and a turning point for US crypto regulation.
According to former SEC official John Reed Stark, the SEC’s long-standing lawsuit against Ripple is also virtually dead in its tracks.
