SEC issues Wells Notice to Robinhood Crypto

The US Securities and Exchange Commission (SEC) has issued a Wells Notice against Robinhood, targeting the publicly-traded company’s crypto business.

The regulatory news saw Robinhood’s share price fall by about 2.2% in pre-market trading. The Robinhood stock price was at $17.95 at 9:20 am ET on Monday.

 SEC’s notice to Robinhood Crypto

According to the Wells Notice, the SEC alleges violations of Sections 15(a) and 17A of the Securities Exchange Act of 1934 against Robinhood Crypto.

Specifically, SEC is indicating its next step of taking an enforcement action against Robinhood Crypto LLC, with investigative subpoenas having been sent around the platform’s crypto listings, custody among other operations.

SEC staff’s “preliminary determination” is that the agency can proceed with an enforcement action filed against the company.

In a response published on May 6, Robinhood said it was disappointed” by the SEC’s actions, which comes despite the company’s attempts to register.

Robinhood Crypto delisted a number of tokens amid SEC’s crackdown in the crypto space.

The platform also shelved products like crypto lending and staking amid the US securities regulator’s allegations that designated several tokens as securities in lawsuits filed against Coinbase, Binance and other crypto platforms.