Robinhood Wins: SEC Shuts Down Crypto Investigation Without Penalty

The crypto trading platform disclosed this update on February 24, just days after being informed of the decision.

The SEC’s Enforcement Division notified Robinhood on February 21 that it would not move forward with penalties. This investigation began in May 2024 when Robinhood received an SEC Wells notice, which signaled that regulators were considering enforcement action over potential securities violations.

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Reacting to the news, Dan Gallagher, Robinhood’s chief compliance officer, stated that “this investigation should never have been opened”. He emphasized that Robinhood Crypto has always followed federal securities laws and has never allowed securities transactions on its platform.

While this investigation has ended without consequences, Robinhood recently settled a separate case with the SEC. In January, the company agreed to pay $45 million after admitting to certain findings related to violations of over ten securities laws.

Following the closure of this investigation, Robinhood urged regulators to focus on providing clear rules for the crypto industry instead of relying on enforcement actions. Many in the industry share this view, arguing that a more structured approach would help businesses comply with regulations.

Meanwhile, former SEC attorney John Reed Stark made a prediction about the SEC's legal battles with crypto firms. What did he say? Read the full story.