Robinhood’s crypto trading venture under legal scrutiny: details
By Surja | Published | No Comments
US-based crypto trading service Robinhood has found itself under legal issues in the US. Earlier this week, the US Securities and Exchange Commission (SEC) issued a ‘Wells Notice’ against Robinhood. With this, Robinhood joins the list of several other crypto firms that have had to face the SEC and explain the intricacies of their trading operations. US authorities want to ensure that its citizens using digital assets are protected from the financial risks arising from these assets.
In the US, the Wells notice implies that authorities such as the SEC are planning to take legal action against the entity to which it is issued, which in this case is Robinhood. The notice reveals that, upon investigation, the SEC has reason to believe that Robinhood has violated US securities laws.
“On May 4, 2024, Robinhood Crypto (RHC) received a ‘Wells Notice’ stating that SEC staff advised RHC that it had made a ‘Preliminary Determination’ to recommend that the SEC File an enforcement action against RHC alleging violations of the Securities Exchange Act of 1934, as amended.” Said The official document outlining the development.
At present, detailed information regarding the proceedings on the case is awaited.
“Potential actions may include a civil injunction action, public administrative proceedings, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, waiver, pre-judgment interests, including civil pecuniary penalties, and denunciations, revocations, and limitations on activities,” the document noted.
Many have criticized the SEC for investigating the crypto sector by fighting one legal battle after another.
Robinhood is being sued by the SEC.
welcome to the party @robinhoodapp,
If you are curious as to why Gary and the SEC are so shameless in their attack on crypto, it is because they are receiving orders from a deep faction of the US government that is trying to shut down crypto in the US. Used to be. pic.twitter.com/ldQ0njTfXp
– Ryan SAdams – rsa.eth :unicorn_face: (@RyanSAdams) 6 May 2024
Isn’t that… the real securities violations the SEC should be focusing on?
After a wobbly start, Robinhood has become one of the most buttoned-up fintechs out there. The idea that RH will harm consumers by selling ETH, AVAX, DOGE, or LINK is ridiculous.… https://t.co/p5YGDRRN0l
– Laura Brookover (@laurabrooksie1) 6 May 2024
The SEC has just sent a Wells notice to Robinhood.
The numbers they have posted about crypto in recent months are astonishing. It is hard to imagine that they would (or could) bring so many enforcement actions at once.
It seems as if they are now abusing the Wales process as a scare tactic.
– Jake Chervinsky (@jchervinsky) 6 May 2024
Earlier, the SEC had launched an intense investigation against crypto giants like Binance and Coinbase citing legal issues surrounding their respective business operations.
Meanwhile, Robinhood is expecting a significant increase in its profits and growth rate. In February, the company Allegedly Revealed that revenue collected from its crypto trading business increased by 10 percent in the fourth quarter compared to a year ago, touching the figure of $43 million (about Rs 560 crore).
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