- Robinhood CEO Vlad Tenev criticizes the SEC’s enforcement action notices, describing it as a “regulatory onslaught” that stifles innovation.
- Robinhood Crypto, which began offering Bitcoin and Ethereum in 2018, has received a Wells Notice from the SEC, putting it on notice for a potential enforcement action.
- Despite previous penalties from regulatory bodies, Tenev asserts that Robinhood Crypto is not afraid of a court battle with the SEC.
Robinhood CEO Vlad Tenev criticizes the SEC’s enforcement actions against crypto, describing it as a stifling regulatory onslaught. Despite previous penalties, Robinhood Crypto remains unafraid of potential court battles.
Robinhood CEO Criticizes SEC’s Regulatory Onslaught
Vlad Tenev, CEO of Robinhood, has become the latest Wall Street power player to criticize the Securities and Exchange Commission’s (SEC) enforcement action notices. Robinhood Crypto disclosed on Friday that it had received a Wells Notice from the SEC, indicating a potential enforcement action. The SEC had previously scrutinized Robinhood Crypto’s token listings and crypto custody practices. Tenev described the SEC’s actions as an “improper attempt by the administrative state to stifle innovation”.
Robinhood Crypto in SEC’s Crosshairs
Following similar warnings sent to Ethereum giant Consensys and Uniswap maker Uniswap Labs, Robinhood Crypto now finds itself a distinct target in the SEC’s crosshairs. Despite not being a crypto-native company, Robinhood began offering investors Bitcoin and Ethereum through its app in 2018. Over the years, it has claimed to grow these offerings cautiously through its crypto arm. Robinhood’s Chief Legal, Compliance, and Corporate Affairs Officer, Dan Gallagher, has stated that the firm’s choices are motivated by a “safety-first” approach.
Robinhood’s Conservative Approach to Crypto
Robinhood Crypto has taken a conservative approach to its crypto offerings, consciously choosing not to offer customers products involving crypto lending or staking. Unlike competitors that list hundreds of digital assets, Robinhood Crypto does not list digital asset securities among the 18 tokens available on its platform. However, following lawsuits against Binance and Coinbase by the SEC, Robinhood Crypto ended support for tokens the SEC claimed to be securities, including Cardano (ADA), Polygon (MATIC), and Solana (SOL).
Previous Regulatory Hurdles and Penalties
Robinhood Crypto has faced regulatory hurdles in the past. It was penalized by the New York Department of Financial Services in 2022 and agreed to pay $30 million to settle charges over alleged compliance failures. In 2020, Robinhood agreed to pay $65 million to settle charges brought by the SEC over misleading statements allegedly made to investors. In 2021, the Financial Industry Regulatory Authority ordered Robinhood to pay a $70 million fine over “widespread and significant harm suffered by customers”.
Conclusion
Despite these previous penalties and the recent Wells Notice from the SEC, Tenev asserts that Robinhood Crypto is not afraid of a court battle with the SEC. He stated that while the company strives to maintain positive and productive relationships with regulators, it is prepared to contest this matter in court if necessary. This ongoing saga highlights the tension between crypto companies and regulatory bodies, as well as the need for clear regulatory guidelines in the crypto space.
