U.S. Regulator Abandons Robinhood Crypto Probe

Robinhood Crypto (RHC), a division of financial services firm Robinhood, announced on Monday that the U.S. Securities and Exchanges Commission (SEC) has shut down a securities violation investigation it was conducting on the firm.

The Securities and Exchanges Commission (SEC) has abandoned its securities violation investigation into Robinhood Crypto (RHC), a division of financial services firm Robinhood, the company announced on Monday.

The development comes three days after competitor Coinbase also announced that the SEC would dismiss its enforcement action against the cryptocurrency exchange. Both firms have described the developments as the beginning of a new era in which the SEC is now moving away from regulation by enforcement and instead focusing on providing firms with regulatory clarity.

The SEC had served RHC with a “Wells notice” in May 2024, over alleged violations of securities laws. The regulator initiated 125 cryptocurrency-related enforcement actions that resulted in penalties exceeding $6 billion during the tenure of former Chairman Gary Gensler, according to financial consulting firm Cornerstone Research.

However, with a new pro-crypto Trump administration and an incoming crypto-friendly SEC Chairman, scenarios like the abandonment of the SEC's aggressive lawsuits, such as the probes into Robinhood and Coinbase, could become increasingly common.

“We applaud the staff’s decision to close this investigation with no action,” said Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer in a statement. “Let me be crystal clear, this investigation never should have been opened.”

Gallagher maintained that Robinhood has been and always will be fully compliant with securities laws, even going as far as to say that “any case against Robinhood Crypto would have failed.”