Robinhood and SEC could butt heads in court at any moment

The US Securities and Exchange Commission has not let up the pressure on the crypto sector going after Robinhood in its latest regulatory move

Robinhood Markets Inc, a company that specializes in trading and has been running a crypto business, has become the latest company to fall in the cross-hair of the US Securities and Exchange Commission (SEC). Robinhood confirmed that it had received a Wells notice on Monday, which is the customary precursor to an enforcement action.

Robinhood still has time to respond before SEC moves forward with its plans and may even settle with the regulator prior to any legal unpleasantry ensuing. Yet, if past cases are any indication, Robinhood and SEC are headed for the courtroom. Robinhood chief legal officer Dan Gallagher has commented on the event and called the decision by the regulator to pursue such action against the firm “disappointing.”

The bone SEC has to pick with Robinhood has been chewed on before, and it has proven the most contentious issue in the industry under the regulator’s watch – are cryptocurrencies securities? Gallagher has firmly denied this to be the case and said: “we firmly believe that the assets listed on our platform are not securities”.”

However, this is not the same view shared by SEC chairman Gary Gensler who said that platforms that offer crypto tokens must be registered with SEC. So far none have done so – whether you mean Ripple or Ethereum, both of which are also dragged into a conflict with the regulator.

One thing is the lack of clear regulation on the part of SEC which has not only stifled innovation according to industry stakeholders, but also created an ecosystem of fear where everyone could end on the short end of the regulator’s wrath.

The prospect has made the industry come together and push back against SEC’s attempts to define crypto tokens as securities.  

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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