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Should Robinhood disclose its crypto activities?

In the wake of the SEC's heavy-handed crackdown in the crypto space, Robinhood now also faces a subpoena.

By Mike Hesp
• 2 min read
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Should Robinhood disclose its crypto activities?

In the wake of the SEC's heavy-handed crackdown in the crypto space, Robinhood is now facing a subpoena.

The American financial services firm Robinhood has received an "investigative subpoena" from the Securities and Exchange Commission (SEC) regarding crypto trading, Bloomberg reports.

This appears in Robinhood's annual report published yesterday, Monday, February 27 (pages 28 and 51-58). According to the report, the subpoena was already issued in December last year — shortly after the collapse of the crypto exchange FTX.

The report says of the subpoena: "If the SEC ... decides that cryptocurrencies supported by our platform are securities, that decision could prevent us from continuing to allow trading in those cryptocurrencies."

In the wake of the SEC's crackdown on the crypto space, more and more exchanges are receiving subpoenas from the SEC. For example, Paxos, the issuer of Binance's stablecoin BUSD, is currently in the crosshairs.

In general, the SEC aims to allow only "qualified custodians" to hold crypto assets for the safety of investors — the majority of crypto platforms don’t meet that standard, according to the SEC.

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