• The US Securities and Exchange Commission (SEC) issued a subpoena to Robinhood Markets in December 2020 over its crypto operations.
• This is part of the SEC’s major crackdown against the digital asset industry after the collapse of Sam Bankman-Fried’s crypto empire last year.
• Robinhood received a similar subpoena from the California Attorney General’s office in regard to its trading platform, custody of customer assets, customer disclosures, and coin listing.
SEC Investigates Robinhood Over Crypto Operations
The US Securities and Exchange Commission (SEC) has issued an investigative subpoena to Robinhood Markets regarding its cryptocurrency operations. This comes as part of the SEC’s major crackdown against the digital asset industry following the dramatic collapse of Sam Bankman-Fried’s crypto empire last year.
Subpoena Details
According to its latest 10-K filing, the subpoena is in regard to supported assets at its subsidiary Robinhood Crypto LLC, as well as its custody of cryptocurrencies and other platform operations. The SEC previously maintained that existing securities laws would not exempt digital asset firms from compliance, suggesting that some tokens meet their definition of a security – which was met with vehement opposition from within the crypto industry.
Previous Subpoena Request
This isn’t the first time that Robinhood has been subpoenaed by a regulatory watchdog in the country; a similar request was made by California Attorney General’s office regarding its trading platform, custody of customer assets, customer disclosures as well as coin listing. The platform asserts it is cooperating with their investigation.
Crypto Revenue Impacted By Market Conditions
As a result of tumultuous market conditions in 2022, Robinhood’s crypto revenue shrank significantly which impacted their overall total net revenue for that year too.
Conclusion
Robinhood remains under scrutiny by both federal and state agencies for their cryptocurrency operations due to potential violations relating to securities laws and other regulations within this space. As such, it will be important for investors and users alike to continue monitoring developments related to this ongoing investigation moving forward.