Robinhood said it received an investigative subpoena by the SEC in December soon after FTX’s collapse. The subpoena called for information regarding the trading app’s crypto business, it said in a 10-K filing.
Regulators are clamping down on the crypto industry following the FTX fiasco – targeting firms including Gemini and Kraken.
The subpoena concerned, among other things, Robinhood’s “cryptocurrency listings, custody of cryptocurrencies, and platform operations.” Robinhood also received similar subpoena requests from the California Attorney General’s office regarding its trading platform, custody of customer assets, customer disclosures and coin listing. The company said it is cooperating with California’s investigation.
Robinhood was likely referring to the SEC’s drilling into a slew of crypto companies following the shocking collapse of FTX that turned to industry on its head. It’s taken aim at some big names like Gemini and Kraken, using rules on unregistered securities to clamp down on the industry. Robinhood has also come under pressure recently after it lost $57 million in a glitch that let its trading app customers temporarily short a meme stock.
At the same time, the company said it will buy back shares seized from FTX founder Sam Bankman-Fried worth more than half a billion. The shares were at the heart of four-way legal battle between Bankman-Fried, FTX’s new bosses, cryptocurrency lending firm BlockFi and FTX creditor Yantan Ben Shimon, as all parties laid claim to the 7.6% stake in Robinhood.
“To the extent that the SEC or a court determines that any cryptocurrencies supported by our platform are securities, that determination could prevent us from continuing to facilitate trading of those cryptocurrencies (including ceasing support for such cryptocurrencies on our platform),” Robinhood said. “It could also result in regulatory enforcement penalties and financial losses in the event that we have liability to our customers and need to compensate them for any losses or damages,” it added.
Robinhood was likely referring to the SEC’s drilling into a slew of crypto companies following the shocking collapse of FTX that turned to industry on its head. It’s taken aim at some big names like Gemini and Kraken, using rules on unregistered securities to clamp down on the industry. Robinhood has also come under pressure recently after it lost $57 million in a glitch that let its trading app customers temporarily short a meme
