Robinhood received a subpoena from the SEC shortly after FTX collapsed
Robinhood, a popular mobile stock trading platform that also allows users to buy and sell cryptocurrency, received a subpoena from the US Securities and Exchange Commission (SEC) regarding its cryptocurrency business in December 2022.
The subpoena requested information about Robinhood’s “supported cryptocurrencies, cryptocurrency custody and platform operations,” according to the company’s 2022 annual report filed Monday.
The citation in the annual report was brief and did not specify why the subpoena was issued or what information the SEC was seeking.
A Robinhood spokesperson declined to comment when contacted by wealth. A spokesman for the SEC said wealth that it “does not comment on the existence or non-existence of a possible investigation”.
The subpoena, which came shortly after cryptocurrency exchange FTX filed for bankruptcy in November 2022, comes as Robinhood struggles to reinvent its crypto business. The company reported sustained declines in its crypto trading revenue in the fourth quarter of 2022 and has sought to shed its association with Sam Bankman-Fried, the disgraced founder of FTX, after its board plans to buy back more of the company than $550 million of stock Bankman-Fried purchased earlier in 2022.
The SEC’s subpoena also comes amid a broader push by the agency to investigate, and in many cases penalize, crypto and crypto-related companies.
In January, the SEC accused both Gemini, a cryptocurrency exchange founded by the Winklevoss twins, and Genesis, owned by famed cryptocurrency investor Barry Silbert, of unregistered offering and selling of securities through the companies’ joint revenue-generating product: Gemini Earn.
In February, the government arm responsible for overseeing the securities market reached a $30 million deal with Kraken, one of the largest cryptocurrency exchanges, after claiming the exchange’s staking function was a securities offering.
And recently, the SEC reportedly told Paxos, a stablecoin issuer, that it intends to sue the company for its work on BUSD, a U.S. dollar-pegged stablecoin that is being issued in partnership with Binance, the largest cryptocurrency exchange by trading volume the world, was spent . Paxos is reportedly in talks with the SEC about the pending lawsuit.
Learn how to navigate and build trust in your organization with The Trust Factor, a weekly newsletter exploring what leaders need to succeed. Login here.
