- Robinhood says the SEC has dropped a probe against it.
- The regulator has dropped several similar cases recently.
The Securities and Exchange Commission has officially closed its investigation into Robinhood as the agency moves away from its crypto crackdown, the fintech firm said on Monday.
Dan Gallagher, Robinhood’s chief legal officer, applauded the move and ”a return to the rule of law and commitment to fairness at the SEC.”
“Let me be crystal clear — this investigation never should have been opened,” he said. “Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities.”
He said the firebrand campaign against crypto led by Gary Gensler, the previous chair of the SEC, even dissuaded the stock trading app from providing certain products and services to its users.
HOOD stock dropped 5% at market open on Monday.
The SEC told Robinhood it would take action against the company for alleged securities violations in May 2024 — an allegation the regulator launched at a slew of crypto stalwarts.
The SEC has not officially confirmed the news.
“We decline comment,” an SEC spokesperson told DL News.
Robinhood did not immediately respond to requests for comment.
Robinhood’s crypto services contributed to a 58% jump in Robinhood’s net total revenue of $2.9 billion in 2024. Crypto also helped the brokerage record net income of $1.4 billion.
“We can be a major player,” Johann Kerbrat, the trading app’s crypto boss, told DL News in January.
Coinbase and Binance
Since President Donald Trump appointed Mark Uyeda as the acting chairman of the SEC in January, several investigations into various crypto companies have been put on hold or dismissed.
Under Gensler, the regulator took aim at some of the industry’s largest crypto exchanges, such as Coinbase and Binance, for allegedly operating an unregistered securities exchange.
Coinbase announced on February 21 that the agency “agreed in principle to dismiss its unlawful enforcement case” against the crypto exchange.
In a motion filed with Binance and its former CEO Changpeng Zhao on February 11, the SEC announced it would pause its lawsuit against the exchange for 60 days.
Devin Finzer, the CEO and founder of the non-fungible token platform OpenSea, announced on February 22 that the SEC had also closed its investigation into the crypto company. The regulator alleged NFTs sold on the platform were unregistered securities in August 2024.
The SEC’s decision to delay and dismiss multiple lawsuits targeting major crypto firms is an extraordinary development. And one not lost on the agency’s former staffers.
“Buckle up, get the popcorn, and get ready for the SEC funeral,” John Reed Stark, the former chief of the SEC’s Office of Internet Enforcement and crypto critic, wrote on Thursday.
“Of course, when the crypto contagion spreads across the global capital marketplace like wildfire and the crypto-crime wave floods US cities and towns like a tsunami, ask not for whom the bell tolls, it tolls for thee.”
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.