SEC Drops Robinhood Crypto Investigation

U.S. Regulator Abandons Robinhood Crypto Probe

Robinhood Crypto (RHC), a division of financial services firm Robinhood, announced on Monday that the U.S. Securities and Exchanges Commission (SEC) has shut down a securities violation investigation it was conducting on the firm.

Robinhood’s statement comes just three days after competitor Coinbase also announced that the SEC would dismiss its enforcement action against the cryptocurrency exchange. Both firms described the developments as the beginning of a new era in which the SEC is now moving away from regulation by enforcement and instead, focusing on providing firms with regulatory clarity.

Robinhood received the dreaded “Wells notice” from the SEC in May 2024 alleging violations of securities laws. The regulator initiated 125 cryptocurrency-related enforcement actions totaling more than $6 billion in penalties under former Chairman Gary Gensler, according to financial consulting firm Cornerstone Research.

But now, with a new pro- crypto Trump administration, and an incoming crypto-friendly SEC Chairman, scenarios where the regulator abandons aggressive lawsuits such as the probes into Robinhood and Coinbase, may become increasingly common.

“We applaud the staff’s decision to close this investigation with no action,” said Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer “Let me be crystal clear, this investigation never should have been opened.”

Gallagher was adamant that Robinhood has been and always will be compliant with securities laws, going as far as saying “Any case against Robinhood Crypto would have failed.”