Robinhood Markets has announced that it has received a subpoena for an investigation from the United States Securities and Exchange Commission (SEC) regarding its altcoin listings, custody services and platform operations. Here are the details…
Subpoena to Robinhood
Robinhood Markets, which runs the stock and crypto trading app and is listed on the Nasdaq, received a subpoena for an investigation from the US Securities and Exchange Commission (SEC) in December regarding cryptocurrency trading and transactions. This development emerged in the financial performance K file submitted to the SEC on Monday. According to the document, the investigation subpoena concerned Robinhood’s “cryptocurrency listings, cryptocurrencies custodian and platform operations.”
Robinhood said the subpoena was received in December as the SEC stepped up its scrutiny of the crypto industry after multiple bankruptcies in 2022, including the collapse of Bahamas-based crypto exchange FTX.com in November. The company said it had previously received similar subpoenas from the California Attorney General’s Office about “the trading platform, its business and operations, oversight of client assets, client disclosures and coin listings.” He said he was cooperating with all these investigations.
The firm disclosed the SEC subpoena on page 28 of the document in a section outlining the potential risks to the company should the SEC change a particular cryptocurrency classification to a security. “The status of any cryptocurrency as a security is subject to a high degree of uncertainty and if we do not properly identify one or more cryptocurrencies, we may be subject to regulatory review, investigations, fines and other penalties,” Robinhood said. So Robinhood stated that if any cryptocurrency determines that it is a security, it may have to stop trading cryptocurrencies.
What altcoin projects does Robinhood support?
So, what are the coins that Robinhood has listed, hence the regulatory endangerment? Currently, Robinhood lists 17 altcoins apart from Bitcoin. Meme coins like Shiba Inu (SHIB), Dogecoin (DOGE), as well as Ethereum (ETH), the largest altcoin by market cap, and Ethereum Classic (ETC), the fork of ETH; among those listed. In addition, USD Coin (USDC), a stablecoin, is also on the platform. Apart from these, Uniswap (UNI), Tezos (XTZ), Stellar (XLM), Polygon (MATIC), Solana (SOL), Avalanche (AVAX), Aave (AAVE), Bitcoin Cash (BCH), Cardano (ADA), Chainlink ( LINK), Compound (COMP), Litecoin (LTC) are also presented in Robinhood.
SEC’s latest moves towards crypto companies
The SEC fined US crypto exchange Kraken $30 million in early February for offering a “staking-as-a-service” program that the agency says violates the Securities Act. Kraken later shut down its staking service. As we reported on Kriptokoin.com, the agency also accused cryptocurrency lender Genesis Global Capital and crypto exchange Gemini Trust in January, claiming that the company’s “Earn” loan program was tantamount to offering and selling unregistered securities.
Robinhood has become a popular app for stocks and cryptocurrencies thanks to its low transaction fees. However, according to its latest earnings report, the company’s crypto earnings fell 24 percent to $39 million in the fourth quarter of 2022. As is known, subpoenas are issued by the court upon the request of another person or organization to obtain the necessary information to decide whether to initiate legal action against the summoned person or organization.
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