Robinhood Markets is weighing on its crypto offerings according to the firm’s legal chief Dan Gallagher amid intensified crackdown on the industry.
The move comes as the securities regulator targeted a broad swath of the digital asset market, launching a pair of lawsuits against two heavyweights – Binance and Coinbase – that together account for half of the global trading of cryptocurrencies.
- While testifying before the House Agriculture Committee during a meeting focused on digital assets, Gallagher, a former SEC commissioner, said Robinhood is “actively reviewing” the US Securities and Exchange Commission’s (SEC) analysis “to determine what, if any, actions to take.”
- Robinhood, on the other hand, provides users access to 18 different digital assets, including Solana (SOL), Cardano (ADA), and Polygon (MATIC), which are being now deemed as unregistered securities, based on the SEC’s lawsuits this week.
- While the NASDAQ-listed investing company’s trove of crypto is relatively limited compared to Binance and Coinbase, it is keen on not drawing the SEC’s attention.
- The brokerage firm had already been in trouble with several US-based regulators due to its operations. Earlier this year, Robinhood was ordered to pay over $10 million in fines for registering operational deficiency that adversely impacted investors during the COVID-19 crisis.
- It was also slapped with a $30 million penalty last summer by the New York State Department of Financial Services (NYDFS) for violating anti-money laundering and cybersecurity laws.
- The agency also found “significant failures” in the firm’s compliance program and allegedly followed policies that did not align with NYDFS’ virtual currency and cybersecurity regulations.