First Coinbase, now Robinhood.
Robinhood revealed Monday that the SEC has dropped an investigation into the firm’s crypto business, signaling a potential shift in regulatory attitudes toward digital assets.
In a blog post, the company said it had received a letter from the SEC’s Enforcement Division stating that the agency would not pursue enforcement action against Robinhood’s crypto unit.
"Let me be crystal clear – this investigation never should have been opened," Dan Gallagher, the former SEC commissioner who took on the chief legal officer role at Robinhood in October, said in the blog post. "We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC.”
The decision comes after a similar development at Coinbase, which said the SEC also chose to drop charges against the firm on Friday.
Robinhood received a Wells notice from the SEC in May last year, which had prompted the firm to signal potential charges related to its cryptocurrency listings, custody, and platform operations. The firm maintained that it had “years of good faith attempts to work with the SEC for regulatory clarity,” according to Gallagher.
“Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities,” Gallagher said on Monday. “We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC."
The SEC’s dismissal of cases against both Robinhood and Coinbase follows a change in leadership at the agency. Former Chair Gary Gensler, who had taken a strict enforcement-driven approach to crypto regulation, was replaced by Paul Atkins, a Trump administration appointee with a more industry-friendly stance.
Robinhood’s fourth-quarter earnings highlighted the growing significance of crypto in its business model, with nearly half of its $672 million transaction-based revenue driven by a sevenfold rise in crypto trading on the platform, according to CNBC. That came amid a surge in bitcoin prices, which rallied and passed the $100,000 mark in December amid expectations of more favorable policies under the Trump administration.
With the investigation behind it, Robinhood is now looking to expand its crypto operations globally. The company recently announced plans to acquire Bitstamp, a crypto exchange, in a $200 million deal aimed at broadening its offerings and attracting institutional clients.
“Currently, there is a more innovation-friendly stance on crypto, and that’s going to help that part of our business undoubtedly,” Robinhood CFO Jason Warnick said in an interview with the Wall Street Journal.
The company has already moved faster on crypto expansion in Europe, where regulatory guidelines are clearer than in the US. In Europe, Robinhood allows investors to earn interest on their crypto holdings and trade a broader range of digital assets than it currently offers stateside.
Warnick expressed optimism that US regulators would provide more clarity on crypto rules, allowing Robinhood to introduce new offerings such as tokenization—the process of putting real-world assets like stocks on the blockchain. “We should be able to innovate faster here in the US, and for the last few years, we’ve been able to innovate faster outside of the US,” he said.
Despite its increasing focus on digital assets, Warnick maintained that the firm's core brokerage business remains a priority. The company offers traditional investment accounts but has yet to expand into areas such as custodial, trust, or mutual fund accounts.
Apart from its aggressive move towards crypto, Robinhood is also casting its sights on the RIA world via its strategic acquisition of custodial platform TradePMR. The $300 million cash-and-stock deal announced in October, which would give it a pathway to refer retail trading clients to financial advisors at RIAs, is expected to close in the first half of this year.
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