Robinhood has divulged that it has been handed a subpoena by the Securities and Exchange Commission (SEC). There also happens to be a mention of the reason being the entity’s cryptocurrency-related activities and dealings and the cryptocurrency listings. There is also the factor of custody of cryptocurrency, along with that of platform functioning. Further, the prime fintech company also happens to be aware of the fact that if legalities get in the way, it could go in the direction of the seizure of digital asset trading on its platform.
Further still, as informed by reliable sources at Robinhood, if the SEC comes under the impression that the cryptocurrencies that are backed by the platform are in the form of securities, it would inevitably stop all activities related to the trading of those very cryptocurrencies. This subpoena was handed over to them following the collapse of the FTX. As an entity, Robinhood is instrumental in customer trading where certain cryptos are concerned, which, to their knowledge, are not securities as per the U.S. federal and state securities laws.
Robinhood has witnessed an increase in crypto trading over the past year in spite of the fact that there has been a disruption in the market. It also introduced its crypto wallet to over 10,000 iOS users. According to the CEO, Vlad Tenev, the FTX fallout actually turned into a boon for the company, pushing its market share upwards. Although crypto trading was lowered in the fourth quarter by 24%, their crypto trading figures rose by 95%.