Robinhood Crypto (RHC) has emerged victorious as the U.S. SEC officially closed its investigation. The company recognized on Feb. 21 that on that day, the Division of Enforcement of the SEC sent them a notice stating that no enforcement action would be taken. The breakthrough is a major victory for Robinhood and crypto.
The investigation shadowed RHC in May 2024, where the SEC sent a Wells Notice, signaling potential legal action. The agency is, however, abandoning the case. The news comes only days following Coinbase’s disclosure of a similar resolution to their case against the SEC.
Robinhood has always taken the position that most digital asset buys do not fall under securities law. Contrary to its competitors, RHC deliberately decided to hold off on including various types of securities on its platform, as defined by the SEC.
Robinhood calls for clearer regulations
The move is a sign of potential enforcement by regulators. Robinhood has appealed to the regulators to provide clear regulations rather than rely on enforcement. The company is, however, open to cooperating with the SEC to develop an open system of regulations for digital currencies.
This decision is also representative of the growing preference for clear regulations in the crypto space. Companies have found uneven regulations to be challenging, oftentimes having to deal with legal ambiguity. The case of Robinhood illustrates the preference for having a structured approach to compare to compliance.
With the case settled, Robinhood is free to concentrate on expanding its crypto business. The business continues to push forward while keeping up with legal regulations. The breakthrough may have future implications for regulators, holding out the potential for greater predictability and fairness in crypto regulations.
