• Robinhood, a leading American financial service provider, revealed that it received an investigative subpoena from the Securities and Exchange Commission (SEC).
• This was related to its cryptocurrency listing and platform operations.
• The firm also disclosed that its reputation could take damage due to prolonged weakness in the cryptocurrency market.
Robinhood Receives SEC Subpoena
Robinhood, a leading American financial service provider, disclosed a subpoena by the United States Securities and Exchanges Commission (SEC). The disclosure made in the annual report stated that it received an investigative subpoena related to cryptocurrency listing and platform operations. Additionally, the firm also stated that its reputation could stand to take damage because of a „prolonged weakness“ in the cryptocurrency market.
Cryptocurrencies Listed on Platform
Currently, Robinhood has 18 cryptocurrencies listed on its platform. But not all coins are available for trading in all states. Cryptocurrencies like Avalanche (AVAX), Cardano (ADA), Compound (COMP), Polygon (MATIC), Shiba Inu (SHIB), Solana (SOL), Stellar Lumens (XLM), Tezos (XTZ) and Uniswap (UNI) are not available for trading in New York. Whereas, Circle’s stablecoin USDC is not available for trading in New York and Texas.
Reason Behind Subpoena
The company received an investigative subpoena from the SEC regarding topics such as Robinhood’s cryptocurrency listings, custody of cryptocurrencies, and platform operations days after major crypto exchange – FTX – collapsed and several other crypto-firms filed for bankruptcy. Moreover, founder of FTX – Sam Bankman-Fried – owned 7.6 percent of shares before the exchange went bust which are now held by US Department of Justice while Robinhood is trying to purchase them back from Justice Department with Board of Directors decision made early February 2023.
Not First Crypto Service Provider To Receive Subpoena
Notably, Robinhood is not the first crypto service provider to receive a subpoena from the SEC as Coinbase – another leading U.S.-based crypto exchange – had disclosed one back in August 2022 related to its cryptocurrency listing and operations as well.
In conclusion, Robinhood has been subpoenaed by SEC over matters related to its cryptocurrency listing and platform operations due to recent collapse of FTX along with other crypto-firms filing bankruptcies which resulted in Sam Bankman-Fried’s shares being held by US DOJ while company is trying to purchase them back from DOJ with Board decision made earlier this year when stock took considerable hit too due to prolonged weakness in cryptocurrency market at same time Coinbase also faced similar situation when it too was issued subpoena last year about same matters concerning their own services related cryptocurrencies making clear that this issue is far more widespread than expected till now amongst major companies dealing with cryptos even though they have done nothing wrong yet still facing this kind of pressure from authorities thus making things difficult for them overall having implications of what’s coming next if other companies don’t abide by regulations set forth by authorities or conduct any fraudulent activities which will certainly lead tough times ahead within these sectors given current circumstances prevailing right now due lack proper legal framework governing these industries across many countries hence causing confusion among stakeholders whether they should invest further into these new technologies or not as we can clearly see FTC taking steps protect investors against possible risks involved associated investing into cryptos during volatile markets like this one so going forward need stricter guidelines defining exact roles obligations each players involved order maintain stability within industry itself long run .