The crypto industry is facing a major regulatory crackdown, especially in the United States of America as the US Securities and Exchanges Commission (SEC) take on several crypto projects. Robinhood recently confirmed through its recent 10-K filing with the SEC that the US SEC is also on its neck for its cryptocurrency activities.
Robinhood has revealed that it received an investigative subpoena from the SEC in December 2022, just weeks after the collapse of the FTX crypto exchange. The move by the SEC is the latest against a series of crackdowns against the cryptocurrency industry following the collapse of the FTX and the bankruptcy filing of several other crypto firms.
Potential risks to Robinhood’s business
Robinhood disclosed in the filing that the subpoena from the SEC regarding its “supported cryptocurrencies, custody of cryptocurrencies, and platform operations” is among potential risks to its business.
A subpoena normally requires the respondent to appear before a court and testify for an ongoing investigation.
Besides the SEC subpoena, Robinhood revealed that it also received another subpoena from the California Attorney General’s office regarding its trading platform, custody of customer assets, customer disclosures and cryptocurrency listing. The firm stated that it is cooperating with the California investigations.
At the moment, Robinhood lists 18 cryptocurrencies on its trading app including EthereumBitcoin (BTC), and Dogecoin (DOGE) in addition to stocks. It went through rapid growth during the COVID-19 pandemic because it offers an easy way to start trading, low-interest rates, and stimulus checks.