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SEC Crackdown Continues With Robinhood Joining Their Ire

Robinhood’s (HOOD) digital assets arm, Robinhood Crypto, announced that it received a Wells Notice from the SEC.

Author

Luke Ostapchuk
May 08, 2024 • Estimated Reading Time: 3 minutes

On Monday, Robinhood’s (HOOD) digital assets arm, Robinhood Crypto, announced that it received a Wells Notice from the SEC.

Surprise, surprise… the notice indicates that Robinhood Crypto will be sued for failing to register as a securities exchange and as a clearing agency.

What they’re saying: While Robinhood’s CEO Vlad Tenev took to X to dispute the SECs claims with a vow to fight, crypto CEOs like Coinbase’s Brian Armstrong were quick to welcome Robinhood to the club.

  • While crypto contributed less than 10% to Robinhood’s bottom line last quarter, the company was planning on growing the segment significantly. It even led us at CoinSnacks to ask whether Robinhood was “the next best crypto stock.”

Earnings impact: Robinhood's Q1 2024 earnings significantly exceeded Wall Street predictions, with an EPS of $0.18 against the expected $0.06 and revenue reaching $618 million, well above the forecast of $549 million.

Despite these impressive numbers, the atmosphere was somewhat overshadowed by the recent Wells Notice.

Kinda getting ridiculous: If it seems that regulators are going after a new crypto-related company each and every week by now… it’s cause they actually are. Let’s just quickly review…

  • Robinhood (HOOD), Block’s (SQ) Cash App, Tornado Cash, Samouri Wallet, Uniswap Labs, Ethereum Foundation, Consensys/MetaMask, Coinbase (COIN), Binance, Kraken, Ripple… Who we missing?

These are all the companies currently being investigated or with lawsuits still in progress.

Best part? Yesterday, Sir Gensler went on CNBC and basically threw the media under the bus. Yup, it’s all our fault that the SEC is so focused on attacking crypto. Our reaction? Hey, some of these are public companies… you approved, y’know.

Genlser blames media for focusing on crypto, but crypto companies keep asking “what are the rules?” It’s like playing a game where no one knows what the objective is, but you’re red carded for looking confused.