Robinhood Crypto has said that without proposing any enforcement action, the U.S. Securities and Exchange Commission (SEC) has dropped its probe on the firm. Less than a year after Robinhood got a Wells notice from the regulator, indicating a possible enforcement case, the probe closes.
The SEC’s Enforcement Division notified Robinhood of its decision on February 21, and the company made the information public on February 24. Emphasizing that the probe was unnecessary from the beginning, Dan Gallagher, Chief Legal, Compliance, and Corporate Affairs Officer for Robinhood, applauded the development.
“Robinhood Crypto has never encouraged securities transactions and has always followed federal securities rules,” Gallagher said.
Originally closely examining Robinhood’s bitcoin activities, the SEC was raising questions about possible securities law breaches. The regulator sent Robinhood a Wells notice in May 2024 saying that it was looking at legal action over a claimed incorrect security listing.
Robinhood paid $45 million over violations pertaining to its brokerage activities last month after settling a different dispute with the SEC. But the latest ruling to stop the crypto inquiry points to a change in the regulatory scene.
Industry watchers contend that the SEC’s changed posture reflects more general changes brought forth under the new government. Regulators seem to be veering away from a rigid enforcement-driven strategy with the establishment of a Crypto Task Force toward more transparent rules for the digital asset industry.
The SEC’s recent decision to drop its action against Coinbase without imposing fines also reflected this change. Participants in the market hope that this tendency will result in more predictable and open rules, therefore encouraging innovation and guaranteeing compliance by means of clearer laws.
The approval of Robinhood Crypto marks a significant milestone in the evolving crypto regulatory landscape, as ongoing discussions between authorities and business leaders continue.
