Regulation News

Robinhood Faces US SEC Subpoena For Its Crypto Operations

Robinhood received the investigative subpoena from the SEC a month after FTX filed for bankruptcy. The SEC wants to look into its crypto listings.
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Robinhood Faces US SEC Subpoena For Its Crypto Operations

In a recent development, Robinhood Markets has received a subpoena facing an investigation from the U.S. Securities and Exchange Commission (SEC) over its crypto operations like crypto listing, crypto custody, etc.

In its latest 10K filings, the zero-commission brokerage app stated that it received the investigative subpoena in December, a month after crypto exchange FTX filed for bankruptcy. During the crypto winter of 2022, a large number of crypto trading and lending platforms filed for bankruptcy.

Robinhood noted that amid the crypto bankruptcies last year, investigative subpoenas have come in relation to their crypto listings and custodial business. It added:

“In December 2022, following the 2022 Crypto Bankruptcies, we received an investigative subpoena from the SEC regarding, among other topics, RHC’s supported cryptocurrencies, custody of cryptocurrencies, and platform operations.”

Robinhood vs Regulators

This is not the first time that Robinhood has been facing scrutiny from US regulators. Back in April 2021, Robinhood received subpoenas from the California Attorney General’s Office while seeking information about its crypto arms trading platform, coin listings, custody of customer assets, and much more.

Last year in August 2022, the New York Department of Financial Services (NYDFS) slapped a $30 million fine on Robinhood for failing to “invest the proper resources and attention to develop and maintain a culture of compliance.”

Investigative subpoenas are the primary steps toward obtaining the information necessary to decide whether they want to pursue legal action against the respective person or entity.

Robinhood Markets has been recently under the news especially pertaining to the bankruptcy proceedings of crypto exchange FTX. Earlier this month, Robinhood approved the buyback of Sam Bankman-Fried’s 55 million shares, worth 7.6% stake in Robinhood. They said that they would be purchasing the shares at the market price. However, the timeline for the same isn’t finalized yet.

Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said: “We believe it will be accretive over time and removes a distraction for shareholders”.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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