Robinhood reveals SEC subpoena over crypto custody and listings

US-based retail trading app Robinhood has revealed that it received a subpoena from the SEC over crypto custody and listings

US-based retail trading app Robinhood has revealed that it received a subpoena from the SEC over crypto custody and listings. The United States Securities Exchange Commission has subpoenaed Robinhood Markets in December 2022, a month after cryptocurrency exchange FTX filed for bankruptcy and shook the entire market.

Companies such as Three Arrows Capital, Voyager Digital Holdings and Celsius Network filed for bankruptcy even earlier. Robinhood Markets revealed the investigative subpoena as part of a 10-K filing, and company representatives clarified that it had something to do with its cryptocurrency listings and custody services. These investigative subpoenas are issued by a court at the request of another entity or person.

Their purpose is to obtain information that can assist the court in deciding whether to pursue legal action against the subpoenaed person or entity. This isn’t the first time that Robinhood has had legal troubles. According to WSJ, in August 2022, the company received a USD 30 million fine from the New York Department of Financial Services (NYDFS) for alleged violations concerning anti-money laundering, consumer protection, and cybersecurity laws.

An order from the NYDFS has revealed that the department examined Robinhood Crypto between January 2019 and September 2019. These examinations revealed deficiencies in RHC’s compliance function across multiple areas, which prompted the NYDFS to begin an enforcement investigation. In turn, this investigation brought to light that Robinhood’s crypto division violated aspects of the Bank Secrecy Act and Anti-Money Laundering regulations.

Other Robinhood developments In August 2022, Robinhood decided to fire an additional 713 people after it had already lowered its headcount by 9% three months prior. The downsizing had something to do with the freefall of cryptocurrency values and an unstable stock market, both of which have kept customers off the Robinhood trading app. In January 2023, Robinhood revealed its plans to discontinue support for Bitcoin SV as it wanted to remove it from the platform.

The company halted support for Bitcoin SV on 25 January 2023, and any BSV coins left over in customer accounts after that date were automatically sold in order to credit account holders. Users were still able to buy, sell, transfer, and hold BSV until the deadline. BSV was the only coin that was impacted by the delisting according to Robinhood.

The platform still offers trading on 19 different tokens through the Robinhood Crypto service, including Bitcoin and Bitcoin Cash. The platform also provides access to assets such as stocks, ETFs, and direct cryptocurrency trading, as well as options trading. .

Feb 28, 2023 09:35
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