SEC Drops Robinhood Crypto Probe: A New Era for Crypto Regulation

The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Robinhood Crypto, the cryptocurrency arm of the popular financial services company, without taking any enforcement action. This decision comes less than a year after the SEC issued a Wells notice, indicating its intention to pursue enforcement action against the company.

The SEC's Enforcement Division informed Robinhood Crypto that it had closed the investigation and would not be moving forward with any enforcement action. Robinhood announced this development in a statement today.

Dan Gallagher, head of compliance and corporate affairs at Robinhood Markets, argued that the investigation should never have been opened. He asserted that the company always adheres to federal securities laws and has never allowed transactions in securities.

On May 4, 2024, the SEC issued a Wells notice to Robinhood Crypto, suggesting that it would recommend pursuing enforcement action. At the time, the SEC made a preliminary determination to recommend action against the company for alleged securities violations.

Gallagher stated in the statement, "As we explained to the SEC, any case against Robinhood Crypto would have failed. We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC."

In January, Robinhood reached a $45 million settlement with the SEC over accusations that it broke over 10 securities laws. As part of the settlement, Robinhood admitted to certain findings brought forward by the regulator.

The closing of the SEC's Robinhood probe marks a significant shift in the agency's approach to cryptocurrency regulation. President Donald Trump's administration has undertaken major policy transformations for the crypto market. Shortly after Trump took office on Jan. 20, the SEC rescinded earlier accounting guidance and formed a crypto task force focused on developing a new regulatory framework. Additionally, President Trump signed an executive order on Jan. 23, 2025, intended to create regulatory clarity for digital assets and strengthen the U.S.'s position as the world's leader in the digital asset economy.

The SEC's decision to close its investigation into Robinhood Crypto echoes a broader trend in the industry. Last Friday, the agency ended its investigation into NFT marketplace OpenSea, just hours after agreeing in principle to dismiss its charges against crypto exchange Coinbase. This marked a major legal victory for the exchange and a turning point for U