Robinhood Receives Wells Notice From SEC Regarding Crypto
Robinhood logo

Robinhood Receives Wells Notice From SEC Regarding Crypto

The FinTech brokerage firm Robinhood has announced that it’s received a Wells Notice from the Securities and Exchange Commission regarding its cryptocurrency features.

About the notice and Robinhood’s response:

In a filing, Robinhood revealed that the SEC has notified the company that it will recommend that the agency file an enforcement action, alleging securities violations. Furthermore, they note that these potential actions could involve a civil injunctive action, public administrative proceedings, a cease-and-desist proceeding, and more. The FinTech states that it is cooperating with the Commission.

As Robinhood notes in a blog post on the matter, the platform does not offer products such as lending or staking. Additionally, last year, the company made the decision to delist three crypto assets after the coins were cited by the SEC as alleged securities. These assets include Cardano (ADA), Polygon (MATIC), and Solana (SOL). Robinhood also says that it has attempted to register as a special purpose broker-dealer with the SEC.

What they’re saying:

Commenting on the SEC’s warning and Robinhood’s efforts so far, the firm’s Chief Legal, Compliance and Corporate Affairs Officer Dan Gallagher stated, “After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business. We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.” 

My thoughts:

This certainly isn’t the first time that Robinhood has found itself in some hot water. As many will recall, past controversies include them asserting that their planned checking account would fall under Securities Investor Protection Corporation (SIPC) insurance — which it didn’t — and, of course, the incident where the platform halted trading for certain “meme” stocks, such as GameStop amid a short squeeze. Yet, while those missteps were largely of their own making, this latest issue doesn’t strike me as being their fault. After all, they’re far from the only platform that supports crypto trading, with the likes of PayPal, Cash App, and several others doing the same. Plus, as Robinhood states, they’ve never offered crypto lending or staking.

Of course, at this point, we’re really only hearing Robinhood’s side of the story. Thus, I’ll reserve judgment until the SEC (presumably) releases its full case. In the meantime, Robinhood’s earnings will be released on Wednesday — so that call just got a lot more interesting.


Kyle Burbank

Head Writer ~ Fioney
Kyle is the head writer for Fioney. He is a personal finance nerd, constantly looking for new apps and services to test and incorporate into his own financial game plan. In addition to his role at Fioney, he's written for other publications including Born2Invest, Lifehack, and Laughing Place, as well as his own site Money@30. He also creates personal finance and travel-related videos for Fioney's YouTube channel, which has garnered more than 2 million views. Currently, Kyle resides in Springfield, Missouri with his wife of 10 years. Together, they enjoy traveling (including visiting Disney Parks around the world), dining, and playing with their dog Rigby.

Other Articles by Kyle Burbank

2 Qatar Airways Privilege Club Credit Cards

Cardless Launches Two Qatar Airways Co-Branded Credit Cards

The FinTech startup Cardless is partnering with Qatar Airways to offer two new co-branded cards to the American market. About the cards: Recently, Cardless introduced its two latest rewards credit cards: The Qatar Airways Privilege Club Signature Card and the Qatar Airways Privilege Club Infinite Card. Starting with the Signature card, it earns 4x Avios on Qatar Airways purchases plus 2x Avios on dining purchases, and 1x Avios on all...
Yendo logo and credit card

Vehicle-Secured Credit Card Company Yendo Raises $165 Million

A FinTech that offers the first-ever credit card secured by a customer's vehicle has announced its latest round of funding. About the round: This week, Yendo announced that it had raised $165 million. However, this includes $150 million in debt financing and $15 million in equity. The debt portion was led by i80 group, while the strategic investors that participated in the equity round were not disclosed. Yendo previously raised...
woman holding her hands to her temple thinking

Lessons From a First-Time Home Buyer: Worst Time to Buy a House? There Are Always Exceptions

If you've been thinking about buying a house, looking at the news lately has likely disheartened you. As CNN reports, a recent Gallup poll found that 76% of Americans believe it's a bad time to buy — with only 21% saying it's a good time. There are several reasons for that sentiment, with the top two being the combination of high interest rates and high home prices. So, are you...
The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Brim logo

Brim Financial Raises $85 Million as It Eyes Global Expansion

Toronto-based FinTech infrastructure startup Brim Financial has announced a new funding round. About the round: Brim has revealed an $85 million round. The Series C was led by EDC Investments while new investor Vistara Growth and returning investors White Owl Group, Epic Ventures, and Zions Bank also participated. To date, the company has now raised $110 million including a Series B in 2021. According to Brim, the latest funding will...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories:, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...
Rent Day

Bilt Announces Home Collection Deal for May 2024 Rent Day

For May's Rent Day, Bilt is offering a deal that will allow members to decrease their rent bill while also adding to their home decor. About the Home Collection offer: Bilt has crafted a unique Rent Day offer for May 2024. Through the 1st, when Bilt members redeem their points toward rent payments, they'll receive the same number of points to be used toward Bilt Home Collection items. To take...