In a recent development, Robinhood Markets has received a subpoena facing an investigation from the U.S. Securities and Exchange Commission (SEC) over its crypto operations like crypto listing, crypto custody, etc.
In its latest 10K filings, the zero-commission brokerage app stated that it received the investigative subpoena in December, a month after crypto exchange FTX filed for bankruptcy. During the crypto winter of 2022, a large number of crypto trading and lending platforms filed for bankruptcy.
Robinhood noted that amid the crypto bankruptcies last year, investigative subpoenas have come in relation to their crypto listings and custodial business. It added:
“In December 2022, following the 2022 Crypto Bankruptcies, we received an investigative subpoena from the SEC regarding, among other topics, RHC’s supported cryptocurrencies, custody of cryptocurrencies, and platform operations.”
Robinhood vs Regulators
This is not the first time that Robinhood has been facing scrutiny from US regulators. Back in April 2021, Robinhood received subpoenas from the California Attorney General’s Office while seeking information about its crypto arms trading platform, coin listings, custody of customer assets, and much more.
Last year in August 2022, the New York Department of Financial Services (NYDFS) slapped a $30 million fine on Robinhood for failing to “invest the proper resources and attention to develop and maintain a culture of compliance.”
Investigative subpoenas are the primary steps toward obtaining the information necessary to decide whether they want to pursue legal action against the respective person or entity.
Robinhood Markets has been recently under the news especially pertaining to the bankruptcy proceedings of crypto exchange FTX. Earlier this month, Robinhood approved the buyback of Sam Bankman-Fried’s 55 million shares, worth 7.6% stake in Robinhood. They said that they would be purchasing the shares at the market price. However, the timeline for the same isn’t finalized yet.
Vlad Tenev, CEO and Co-Founder of Robinhood Markets, said: “We believe it will be accretive over time and removes a distraction for shareholders”.