Robinhood Receives SEC ‘Wells Notice’ for Crypto Business

Robinhood said that it has received a warning from the Securities and Exchange Commission stating that the agency has made a “preliminary determination” to file an enforcement action alleging its crypto unit violated securities law.

The retail brokerage app said it received the so-called Wells Notice from the SEC on May 4, according to a filing. The potential action may involve a civil injunctive action, public administrative proceeding or a cease-and-desist proceeding, the filing said.

Robinhood has previously disclosed that the SEC sent investigative subpoenas regarding its crypto listings, custody and platform operations. Other crypto firms, including Uniswap and Paxos, have said they received Wells Notices from the SEC.