Robinhood says SEC issued subpoena related to crypto operations

(Reuters) – Robinhood Markets Inc said in a filing on Monday it had received an investigative subpoena in December from the U.S. Securities and Exchange Commission related to listings of cryptocurrencies.

The collapse of Sam Bankman-Fried’s FTX was the biggest in a string of major crypto-related failures in 2022, which sparked a cryptocurrency rout and left creditors facing losses of billions of dollars.

FTX filed for bankruptcy in November, which spurred an intervention from regulators around the world and dealt a blow to investor sentiment in the sector.

The SEC has maintained that pre-existing securities laws also apply to digital assets and that many crypto tokens meet the definition of a security, which the crypto industry has previously criticized.

Robinhood said the subpoena it received from the SEC was regarding the supported currencies at Robinhood Crypto LLC, which is a wholly-owned subsidiary of the brokerage, as well as its custody of cryptocurrencies and other platform operations.

Earlier this month, Robinhood also said it planned to repurchase its shares from Sam Bankman-Fried’s Emergent Fidelity Technologies as U.S. prosecutors were in the process of seizing its shares tied to the former FTX CEO.

(Reporting by Anirban Chakroborti in Bengaluru; Editing by Krishna Chandra Eluri)

tagreuters.com2023binary_LYNXMPEJ1Q0X4-VIEWIMAGE