Robinhood Markets Inc. disclosed that it received a fact-finding subpoena in December 2022 from the US SEC. The subpoena is related to the listing of cryptocurrencies.
One of the major crypto-linked failures in 2022 was FTX headed by Sam Bankman-Fried. Its failure along with a series of other major crypto-linked collapses. It ignited a cryptocurrency breakdown that left investors and creditors staring at losses worth billions.
FTX filed a bankruptcy suit last November. These spurred regulators across the world to intervene, leading to a cascading effect in this sector. The US SEC has stated that securities law that existed before the cryptocurrency wave started will apply also to digital resources. They said that many of the crypto tokens conform to the definition of securities. This view has been previously criticized by the cryptocurrency industry.
Robinhood Crisis Latest In The Crypto Industry
Robinhood has disclosed in its latest 10-K filing that the subpoena that it has received from the Commission was linked to the supported currency at a wholly held subsidy, Robinhood Crypto LLC. The subpoena was also linked to its ownership of cryptos and various platform operations.
In early February Robinhood disclosed plans to buy back its share held by Emergent Fidelity Tech., headed by Sam Bankman-Fried, even as prosecutors in the US moved in to seize the shares held by the former CEO of FTX.
The trading platform has also received a similar subpoena from the Attorney General’s office in California. The summons is regarding the custody of customer assets, trading platform, coin listing, and customer disclosures. Robinhood has disclosed that it was cooperating with investigators in California.
The market has also noted in its filings that the SEC could only be forced to stop trading in cryptos that any court determines are securities. Robinhood’s shares were down 0.5% following the filing by the SEC.
