Robinhood Markets Inc. said the Securities and Exchange Commission was probing its cryptocurrency business, in the latest signal that the regulator is drilling deeper into virtual asset platforms.
(Bloomberg) — Robinhood Markets Inc. said the Securities and Exchange Commission was probing its cryptocurrency business, in the latest signal that the regulator is drilling deeper into virtual asset platforms.
The brokerage received an investigative subpoena in December related to its cryptocurrency listings and custody, among other topics, Menlo Park, California-based Robinhood said Monday in a filing. The SEC inquiry came shortly after crypto exchange FTX filed for bankruptcy, spurring a wave of regulatory action.
The probe comes as US financial watchdogs take a more aggressive approach to crypto in the wake of FTX’s collapse. In the months following FTX’s November bankruptcy, top financial watchdogs have fanned out across the industry, extracting major penalties and issuing broad warnings.
A spokesperson for the SEC declined to comment. A representative for Robinhood did not immediately respond to a request for comment.
Robinhood allows users to trade several cryptocurrencies, including Bitcoin, Ethereum, Dogecoin and Shiba Inu tokens. Catering to small traders, Robinhood benefited from a wave of crypto investing during the pandemic — but that enthusiasm has been drying up, following a string of high-profile failures that included hedge fund Three Arrows Capital and lenders Voyager Digital Ltd. and Celsius Network.
The dramatic implosion of FTX in November had sweeping repercussions. Robinhood said in an earnings statement earlier this year that it’s looking to repurchase shares of its company that FTX’s disgraced former chief executive Sam Bankman-Fried previously controlled, as sparring parties wrestled for control over the stake.
Read more: US Crackdown Seeks to Push Crypto Back to Fringe of Finance (1)
–With assistance from Austin Weinstein and Meghan Genovese.
(Updates with Robinhood, SEC spokespeople in fourth paragraph.)
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