The US Securities and Exchange Commission (SEC) has been after the cryptocurrency industry ever since it made it in the United States.
The securities regulator has gone after several cryptocurrency firms and issuers of cryptocurrencies implying multiple allegations.
If the regulator wasn’t aggressive enough already, it has become even more after the US Congressmen summoned the SEC Chair, Gary Gensler.
Once in front of congress, Gensler was humiliated for not doing much to put a stop to the scamming and fraudulent crypto projects.
Robinhood is facing the Heat
Since then, Gensler has grown even more aggressive toward the cryptocurrency industry. His aggression is not a personal grudge against the crypto industry.
Instead, it reflects through the aggression that has been demonstrated by the US SEC against the crypto projects.
Since November 2022, the US securities regulator has become very aggressive against crypto projects. It has gone after several major entities such as Coinbase, Binance, and many more.
This time around, the US SEC has gone after Robinhood Markets, a major cryptocurrency trading platform that offers services via the mobile application.
The confirmation has reportedly come from the officials at Robinhood. As per the officials, they have received a subpoena from the regulator.
The regulator has served the platform with an investigative summoning. It is pertaining to the digital assets and the cryptocurrencies the platform has been offering through its platform.
The securities watchdog has alleged that the platform is involved in offering cryptocurrency trading and custody services that are unregistered. Similarly, the platform is involved in listing cryptocurrencies and digital assets without the proper approval.
10-K Filing by the Brokerage
The brokerage reportedly mentioned in the 10-K filing that they had initially received the summoning order from the regulator back in December 2022.
The summoning letter was issued to their platform just a month after FTX exchange had filed for bankruptcy. Following the exchange’s bankruptcy, several other firms proceeded with doing the same due to contagion.
Some of the major firms that filed for bankruptcy include the Celsius Network, Voyager Digital Holdings, and Three Arrows Capital.
Previous Subpoenas against Robinhood
This is not the first time Robinhood has been served with a subpoena by the US watchdogs.
The platform had been served with subpoenas back in April 2021, which were issued by the office of the California Attorney General.
The summoning was to seek information pertaining to the listings of coins, and the custody of assets belonging to the customers.
Other sectors that the watchdog demanded information on were the business and operations, and the trading platform offered by the crypto arm of Robinhood.
The matter did not stop there for Robihood because the same division had to pay up a huge fine imposed by the Financial Services department of the NY District.
As per the sources from back then, the crypto division of Robinhood had to pay a fine worth $30 million. The fine was imposed on the particular division for failing to maintain and develop a culture of compliance.
The fine was implemented due to the improper use of investments and resources for cryptocurrencies and digital assets.
The platform suffered another scrutiny back in August 2021 by the Massachusetts Securities Division.
In this particular matter, the regulator had targeted Robinhood for offering and soliciting cryptocurrency services to investors who were inexperienced.
Despite reaching out, Robinhood has not commented on the matter. It seems that the platform is still going through all the information and evidence it needs, in order to face the regulator in court.
The situation is not looking good for Robinhood given the fact that it has been facing a downtrend in terms of its performance in recent quarters.
It is just the running quarter when the company’s shares and revenues have increased as the crypto market has picked up.
The platform is not ready to face another scrutiny this soon. If the platform is found in breach of these policies, things may turn for the worse for the platform.