SEC Halts Investigation Into Robinhood Over Crypto Activities

The United States Securities and Exchange Commission (SEC) has officially closed its investigation into Robinhood’s cryptocurrency subsidiary without taking enforcement action. The regulator has been scrutinizing Robinhood since May 2024, when it issued a Wells notice indicating possible charges related to its crypto operations.

SEC Drops Case After Nearly a Year

Since receiving the Wells notice, Robinhood Crypto has cooperated with the SEC, maintaining that its digital offerings comply with existing laws. On February 21, the regulatory agency informed the crypto-centric firm that the investigation had been closed without charges. Robinhood’s chief legal officer, Dan Gallagher, welcomed the decision, emphasizing the company’s commitment to compliance. He stated:

“We applaud the staff’s decision to close this investigation with no action. Robinhood crypto always has and will always respect federal securities laws and never allowed transactions in securities. As we explained to the SEC, any case against Robinhood Crypto would have failed. We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC.”

Following the news, Robinhood’s stock, HOOD, rose 2.9% in premarket trading, signaling investors’ excitement.

SEC Softens Stance on Crypto Firms

Robinhood is not the only beneficiary of the SEC’s newfound crypto-friendly stance. Last week, the financial regulatory agency withdrew its lawsuit against Binance.US, the U.S.-based affiliate of the world’s largest cryptocurrency exchange, Binance. The leading crypto exchange, for its part, breathed a sigh of relief after the securities regulator paused its lawsuit against Binance for 60 days. The SEC has also shown a green light towards Coinbase, another crypto exchange, signaling a regulation change.

The SEC has previously argued that these crypto exchanges violated securities laws and facilitated illegal transactions. Under the new administration, the financial regulator has opted for more straightforward crypto oversight rather than long legal battles. Its focus provides more clarity for crypto businesses and could be a positive step in enhancing growth within the crypto market.