The US Securities and Exchange Commission has issued an investigative subpoena to Robinhood Markets regarding the custody, platform, and crypto listings for its digital asset company.
The brokerage claimed in a 10-K filing that it received the investigative subpoena in December, which was one month after the infamous FTX collapse and the chain of bankruptcies that followed.
It was revealed that reasons pertaining to cryptocurrency listings and custody services have led to this. Robinhood might be required to halt trading in any cryptocurrency it supports if the SEC or a court finds them to be securities. This could lead to legal or administrative repercussions, customer responsibilities, and regulatory fines.
The California Attorney General’s Office served subpoenas on Robinhood in April 2021, requesting information about the trading platform, company, and operations, asset custody, and coin listings of its cryptocurrency branch.
The New York Division of Financial Services fined Robinhood’s cryptocurrency subsidiary $30 million on August 2 for not investing “the proper resources and attention to develop maintain a culture of compliance.”
In August 2021, the Massachusetts Securities Division investigated the firm for allegedly preying on novice investors.
A court will issue an investigative subpoena at the request of another person or organisation in order to gather the evidence required to determine whether to file a lawsuit against the subject of the subpoena.
