The United States Securities and Exchange Commission (SEC) stopped investigating Robinhood over alleged securities law violations.
On Feb. 21, the low-cost trading platform was informed by SEC’s enforcement division that it is no longer being investigated by the regulator and no enforcement action will be undertaken. The firm’s compliance and corporate affairs officer Dan Gallagher wrote in a recent announcement:
“[T]his investigation never should have been opened. […] Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities.”
This follows Robinhood paying a $45 million settlement last month, the SEC announcement published at the time that Robinhood-linked entities admitted some wrongdoings. The company was accused of having violated over 10 separate securities laws.
Despite the news, Robinhood stock is nearly 3.5% down on the trading day. At its current price of $49.74, the stock is trading also nearly 24% lower than the price it was changing hands at five days ago.
The details
The closing of the investigation is part of a broader regulatory climate shift in the United States. After current president Donald Trump was elected on a pro-crypto campaign, key officials in regulatory bodies were substituted with pro-crypto candidates.
The SEC recently also introduced a new unit called “Cyber and Emerging Technologies Unit” aiming to combat cybercrime, replacing the former Crypto Assets and Cyber Unit that was a big part of the old administration’s approach to crypto. The regulator also recently introduced a new crypto task force as part of its shift in approach to cryptocurrency.
The new task force will be led by Hester Pierce, called “crypto mom” by the crypto community for her pro-crypto stances even during previous administrations. According to the announcement, the new task force will be “dedicated to developing a comprehensive and clear regulatory framework for crypto assets.”
