SEC Issued Subpoena to Robinhood Over its Crypto Operations

Robinhood Markets said it received an investigative subpoena from the US Securities and Exchange Commission (SEC) in December. The agency’s move is part of a major crackdown against the digital asset industry after the dramatic collapse of Sam Bankman-Fried’s crypto empire last year. The disgraced crypto mogul was recently hit by fresh criminal charges relating to political donations he made while running FTX.

According to its latest 10-K filing, the subpoena is in regard to the supported assets at its subsidiary Robinhood Crypto LLC, as well as its custody of cryptocurrencies and other platform operations.

• The SEC previously maintained that the digital asset industry would not be spared by the pre-existing securities laws, thereby signaling that several tokens meet the definition of a security, a stance that the crypto industry vehemently opposed.
• Furthermore, this isn’t the first time Robinhood had been subpoenaed by a regulatory watchdog in the country.
• A similar subpoena request was served by the California Attorney General’s office regarding its trading platform, custody of customer assets, customer disclosures as well as coin listing. The platform asserted cooperating with their investigation.
• Robinhood’s crypto revenue shrunk as a result of tumultuous market conditions in 2022 that dragged down its overall trading activities.
• The New York State Department of Financial Services (NYDFS) also imposed a penalty of $30 million last summer over allegations that it violated anti-money laundering and cybersecurity procedures.
• The California-based investing platform, however, started off 2023 on a positive note. Its crypto trading volume in January hit $3.7 billion, surging by 95% from the $1.9 billion recorded in December.