Robinhood announced that the U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into the company’s crypto operations, with no intention of pursuing enforcement action. The announcement follows a similar outcome for Coinbase, which also recently saw the SEC end its enforcement case against it.
The news initially led to a rise in Robinhood’s stock, although shares eventually closed 3.2% lower due to a broader market downturn. This development marks a significant regulatory victory for Robinhood after months of scrutiny.
In May 2024, Robinhood received a warning from the SEC, indicating the potential for charges related to alleged securities law violations within its crypto unit. This came after the company had been subpoenaed concerning its cryptocurrency listings, custody practices, and platform operations. Despite these challenges, Robinhood maintained that it had made consistent efforts to cooperate with the SEC and seek regulatory clarity.
Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer, emphasized the company’s commitment to regulatory compliance, stating that Robinhood Crypto has always respected federal securities laws and has never facilitated transactions in securities. He welcomed the SEC’s decision to close the investigation, viewing it as a return to fairness and adherence to the rule of law.
While the SEC did not provide an official comment, the dismissal of investigations into both Robinhood and Coinbase suggests a possible shift in regulatory approach toward the crypto industry. This change aligns with the more favorable stance on cryptocurrency regulation that President Donald Trump had signaled during his election campaign.
During the previous administration, many in the crypto industry criticized the SEC’s enforcement-heavy regulatory strategy, led by former Chair Gary Gensler. Businesses often felt that instead of providing clear operational guidelines, the SEC relied on enforcement actions to set regulatory precedents.
The regulatory reprieve comes at a time of significant growth for Robinhood’s crypto business. In the fourth quarter, nearly half of the company’s $672 million transaction-based revenue stemmed from a 700% surge in crypto trading activity. This spike coincided with bitcoin’s rally toward the $100,000 mark, driven by optimism over more crypto-friendly policies.
So far in 2025, Robinhood’s shares have climbed 34%, reflecting renewed investor confidence following the end of regulatory scrutiny.
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