The United States Securities Exchange Commission has decided to halt its investigation into the crypto arm of popular American financial services provider Robinhood Markets. The decision comes as the fintech firm looks to expand its cryptocurrency business in the United States.
SEC Withdraws Robinhood Investigation
In an official letter to the California-based company, the SEC said it had dismissed the investigation and that it did not intend to “move forward with any enforcement action.”
May 2024 marked the start of the push between the SEC and Robinhood. The regulatory body filed a Wells notice to the financial services provider regarding its cryptocurrency listing and platform operations, leading to a drop in the company’s share price by 2.5%. So far, the lawsuit has led nowhere.
Stating that initiating the investigation was unwarranted in the first place, Dan Gallagher, Chief Legal, Compliance, and Corporate Affairs Officer at Robinhood, praised the SEC’s action for openly dismissing the investigation.
“Robinhood Crypto always has and will always respect federal securities laws and would never allow transactions in securities… As we explained to the SEC, any case against Robinhood Crypto would have failed. We appreciate the formal closing of this investigation and are happy to see a return to the rule of law and commitment to fairness at the SEC,” he stated.
Positive Impact on the Crypto Industry
Dropping the Robinhood case has brought great relief not only to the Menlo Park firm but also to the larger crypto community. Had the SEC pursued the lawsuit, the digital industry could suffer potential setbacks. The company’s shares spiked with a 2.9% rise in premarket trading following the SEC’s announcement.
The company is reportedly moving toward crypto-friendly innovations. In the last quarter of 2024, the financial services provider generated $358 million in revenue from crypto trading.
Meanwhile, the SEC recently closed any further investigation against Coinbase on a similar case.
