Robinhood Markets Inc, a popular brokerage firm known for its commission-free trading, has received an investigative subpoena from the US Securities and Exchange Commission (SEC) related to listings of cryptocurrencies. The subpoena was received in December 2022, according to a filing by Robinhood on Monday.
The SEC has been actively monitoring the cryptocurrency industry, and it has maintained that pre-existing securities laws apply to digital assets, including cryptocurrencies. The regulatory agency has also stated that many crypto tokens meet the definition of security, which has previously been criticized by the industry.
The subpoena received by Robinhood is related to its subsidiary, Robinhood Crypto LLC, which offers support for cryptocurrencies and custody of cryptocurrencies, among other platform operations. The company has not disclosed any further details about the investigation.
This news comes in the wake of a string of major crypto-related failures in 2022, including the collapse of Sam Bankman-Fried's FTX. FTX filed for bankruptcy in November, which led to an intervention from regulators worldwide and left creditors facing losses of billions of dollars. The collapse dealt a significant blow to investor sentiment in the crypto industry.
Robinhood has also recently announced plans to repurchase its shares from Emergent Fidelity Technologies, a company founded by Sam Bankman-Fried. The announcement came as US prosecutors were in the process of seizing its shares tied to the former FTX CEO.
The subpoena from the SEC is a reminder that the crypto industry is still subject to regulatory scrutiny. While the industry has long sought to operate independently of traditional financial regulations, this investigation underscores the fact that cryptocurrencies are not exempt from the laws that govern other financial instruments.
As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!
iOS: t.ly/UUCj
Android: t.ly/cfYt