Shortly after the FTX crypto exchange filed for bankruptcy protection in November, the famous trading platform Robinhood Markets (HOOD) disclosed in its latest 10-K filing that it had received a subpoena from the U.S. Securities and Exchange Commission regarding its crypto operations. The topics covered by the request included Robinhood’s cryptocurrency postings, ownership of coins, and platform operations.
A judge will issue an investigative subpoena at the behest of another party who needs to learn more about the subject of the subpoena before deciding whether or not to file suit against them.
On its trading platform, Robinhood presently offers access to the buying and selling of 18 different cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin. To get their feet wet with digital assets, investors can get started with as little as one dollar. Regarding its trading platform, ownership of customer assets, customer declarations, and cryptocurrency advertising, Robinhood has stated that it has received similar subpoena requests from the office of the California Attorney General. In addition, it stated that it is working together with the investigation that is being conducted in California.
In November, the exchange FTX collapsed after its operator acknowledged they did not have sufficient funds to cover client assets upon exit. The prosecution claims illegal mismanagement occurred at the cryptocurrency exchange where customers could buy, trade, and wager on the value of various digital currencies.
To spend the appropriate resources and care to create and sustain a culture of accountability, the New York Department of Financial Services (NYDFS) fined Robinhood $30 million on August 2. This was for Robinhood’s cryptocurrency business.
