Robinhood, an online brokerage that lets customers trade stocks, crypto, and other financial assets, announced Monday morning that the Securities and Exchange Commission had closed its investigation into its crypto business. The public company said it learned about the closure on Friday.
“Let me be crystal clear—this investigation never should have been opened,” Dan Gallagher, chief legal officer at Robinhood, said in a statement. “Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities.”
The SEC’s decision to stop the investigation into Robinhood’s crypto arm is an about-face for the financial regulator. In May, agency lawyers informed Robinhood that they had recommended to SEC’s commissioners that the regulator bring a lawsuit against the brokerage for alleged violations of securities law.
At the time, Robinhood said the SEC's allegations concerned the listing of certain cryptocurrencies. Currently, the firm lets users trade more than 20 cryptocurrencies on its platform. “We firmly believe that the assets listed on our platform are not securities,” Gallagher said in a statement.
The SEC regulates securities, such as stocks and bonds, and any exchange that lists them without prior approval from the agency is in violation of the law. The agency declined to comment on its decision to drop the Robinhood probe.
SEC relaxes crypto crackdown
Robinhood is the latest company to announce that the SEC, under President Donald Trump, has dropped an investigation into its crypto business.
After the fall of crypto exchange FTX in November 2022, the regulator, under President Joe Biden, cracked down on the crypto industry. In 2023, it sued dominant crypto exchanges like Binance, Coinbase, and Kraken, as Gary Gensler, then chairman of the SEC, argued that the vast majority of cryptocurrencies were securities and subject to agency oversight.
Crypto industry advocates maintained that digital assets didn’t fit within the framework of decades-old securities law. Judges, though, were split on the issue as cases against different crypto companies worked their way through the courts.
After Trump assumed office in January, the tides changed within the SEC. Acting chair Mark Uyeda announced the formation of a task force to hammer out crypto regulation. He restructured the former crypto enforcement unit into a smaller force focused more broadly on cyber fraud. And his agency dropped cases against namebrand crypto firms.
In February, the SEC paused its litigation against Binance. One week later, Coinbase announced that the SEC had dropped its case against the U.S.-based crypto exchange. That same day, OpenSea, once the largest marketplace for non-fungible tokens, or NFTs, said the SEC had halted its investigation into the NFT company.
