Retail trading platform Robinhood Markets said on Monday its U.S. cryptocurrency trading arm received a Wells notice from the United States Securities and Exchange Commission (SEC) on May 4.
A Wells notice does not necessarily mean that recipients
have violated any law. The SEC issues Wells notices to firms when it is
planning to bring enforcement action against them.
The SEC has adopted a tough stance toward the digital
currency industry, especially after the high-profile collapse of now-bankrupt
FTX cryptocurrency exchange, and has contended that certain crypto tokens
should be registered as securities.
Crypto firms have accused the regulator of overreach. They
have also warned that a hostile regulatory environment could prompt more crypto
companies to move offshore.
“We firmly believe that the assets listed on our platform
are not securities and we look forward to engaging with the SEC to make clear
just how weak any case against Robinhood Crypto would be,” Dan Gallagher, chief
legal, compliance and corporate affairs officer at Robinhood, said in response
to the Wells notice.
The SEC declined to comment.
Robinhood Crypto enables customers to deposit and withdraw
cyptocurrencies to and from its custodial platform and also routes customer
orders to liquidity providers based on the lowest price.
Last year, it removed digital tokens Solana, Cardano and
Polygon from its platform.
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