Robinhood (NASDAQ:HOOD) received a subpoena from the Securities and Exchange Commission (SEC) this past December, according to the firm’s 10-K that was filed today.
According to the document, the SEC’s request arrived following the collapse of FTX:
“And in December 2022, shortly after FTX filed for bankruptcy on November 11, 2022, and following the bankruptcies of several other major cryptocurrency trading venues and lending platforms earlier in 2022, including Three Arrows Capital, Ltd., Voyager Digital Holdings, Inc., and Celsius Network LLC (“Celsius”) (collectively, the “2022 Crypto Bankruptcies”), we received an investigative subpoena from the SEC regarding, among other topics, RHC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations.”
First reported by Reuters, the subpoena should come as no surprise as the Commission has stepped up its scrutiny of all crypto or crypto adjacent platforms.
Robinhood also mentioned Kraken’s $30 million penalty for its staking service – now halted for US investors. Robinhood stated:
“While we do not currently offer crypto staking services, the status of this or any action, settlement, or related investigation by regulators, might provide additional guidance on the legal status of cryptocurrencies as securities more generally, which might significantly affect the actual or perceived regulatory status and value of cryptocurrencies we currently support or might support in the future. From time to time, we have received, and might in the future receive SEC inquiries regarding specific cryptocurrencies supported on our platform and added features and 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.”
Another legal mention includes subpoenas from the California Attorney General’s Office seeking information about Robinhood’s trading platform, custody of customer assets, customer disclosures, and coin listings.
FTX is probably the straw that broke the camel’s back when it comes to digital asset investigations. As FTX founder Sam Bankman-Fried was a Washington, DC regular suspect – including visits to the SEC – policymakers are leery of letting another crypto asset firm cause another financial meltdown. Robinhood is just collateral damage from FTX’s, and other failed crypto platforms’ malfeasance.