Trading platform Robinhood says its cryptocurrency arm has received a Wells notice from the Securities and Exchange Commission, indicating that the US regulator is set to take enforcement action.
In February, Robinhood disclosed that it had received subpoenas from the SEC related to its cryptocurrency listings, custody and platform operations.
Now it has been sent a Wells notice, which are usually issued to warn companies that the SEC has enough information to take enforcement action.
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our US crypto business,” says Dan Gallagher, chief legal, compliance and corporate affairs officer, Robinhood in a blog.
Gallagher, a former SEC commissioner, adds: “We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
The company adds that it has already made "difficult choices" to not list some tokens or provide products, such as lending and staking, that the SEC previously alleged are securities in public actions against other platforms.
It has stopped support for Cardano, Polygon and Solana on June 27, which were named as securities in SEC lawsuits against Binance and Coinbase.