SEC’s Wells Notice to Robinhood Sparks Reaction in Crypto Industry: Impact on Bitcoin (BTC) and Ethereum (ETH)

• Renowned crypto lawyer, Bill Morgan, warns of a potential permanent feud between the crypto industry and the U.S. Securities and Exchange Commission (SEC).
• Variant’s CLO, Jake Chervinsky, criticizes the SEC for alleged abuse of the Wells process.
• Robinhood responds to the Wells Notice received from the SEC, asserting that the assets listed on its platform are not securities.

Explore the escalating tension between the crypto industry and the SEC, as industry experts warn of a potential permanent feud. This article delves into the recent criticisms of the SEC’s handling of Wells Notices and Robinhood’s response to their own notice.

Bill Morgan Foresees Permanent Feud Between Crypto Industry and SEC

Renowned crypto lawyer, Bill Morgan, has expressed concerns over the increasing tension between the crypto industry and the U.S. Securities and Exchange Commission (SEC). According to Morgan, this bad blood could potentially degenerate into a permanent feud. He made these comments in response to the reactions towards the recently issued Wells Notice by the SEC to Robinhood.

Criticisms of SEC’s Handling of Wells Notices

Morgan noted that some commentators sympathetic to the SEC have accused companies receiving Wells Notices of not acting appropriately. These sympathizers believe that the affected companies often resort to public attacks on the SEC. Jake Chervinsky, the Chief Legal Officer at Variant, is one such critic. In a recent post, Chervinsky accused the SEC of abusing the Wells process, noting the commission has sent an astonishing number of Wells Notices in recent months.

Chervinsky Questions SEC’s Resource Allocation

Chervinsky also criticized the SEC for allocating a disproportionate amount of its resources to crypto, given its primary purpose of regulating equity and debt markets. He argues that every minute and taxpayer dollar the SEC spends on crypto detracts from the genuine mission that Congress created the SEC to pursue.

Robinhood Responds to Wells Notice

On Monday, Robinhood announced it had received a Wells Notice from the SEC concerning crypto-traded tokens on its platform. In response, Dan Gallagher, chief legal, compliance, and corporate affairs officer at Robinhood, asserted that the assets listed on its platform are not securities. Gallagher further stated that the firm looks forward to engaging with the SEC to clarify that there is no case of wrongdoing against it.

Conclusion

The escalating tension between the crypto industry and the SEC underscores the regulatory challenges facing the rapidly evolving digital asset space. As the debate continues, the industry will be keenly watching how these issues are resolved and what implications they may have for the future of crypto regulation.