The US Securities and Exchange Commission (SEC) has officially concluded its investigation into Robinhood crypto trading operation, according to a letter the body sent to the platform on February 21.

The SEC’s Enforcement Division informed RHC that it had concluded its investigation and did not intend to move forward with an enforcement action.

Concerning the recent SEC notice, Robinhood Markets’ Chief Legal, Compliance, and Corporate Affairs Officer Dan Gallagher expressed relief and satisfaction with the agency’s decision, emphasizing the company’s commitment to complying with federal securities laws and maintaining a strong regulatory framework.

He said, “We applaud the staff’s decision to close this investigation with no action.”

“Let me be crystal clear—this investigation never should have been opened. Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities. As we explained to the SEC, any case against Robinhood Crypto would have failed. “

US SEC Serves Robinhood a Wells Notice

In May 2024, the US SEC issued a Wells notice to Robinhood Crypto, foreshadowing potential enforcement action. This formal notification is typically a precursor to regulatory action, alerting companies to potential violations.

For Robinhood Crypto, the SEC cited concerns under Sections 15(a) and 17A of the Securities Exchange Act of 1934, which regulate broker-dealer registration and securities exchange operations, respectively.

However, following the issuance of the Wells notice, the crypto platform cooperated with the SEC’s investigation, providing documentation and testimony to address the regulatory body’s concerns.

Furthermore, Robinhood Crypto made changes to its platform, including dropping support for certain cryptocurrencies like Cardano, Polygon, and Solana, after the SEC classified these assets as securities in lawsuits against other major exchanges like Coinbase and Binance.

A Shift Towards Regulatory Clarity?

Since the Trump administration took office and appointed a new, more crypto-friendly SEC Chair to replace Gary Gensler, the regulatory body has been shifting towards a more favorable stance as seen in its recent decisions.

A few days ago, the SEC dismissed its lawsuit against crypto exchange Coinbase. In addition, a recent report revealed that the body also suspended its lawsuit against Binance, giving the platform a temporary 60-day reprieve.