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SEC Issues Wells Notice to Robinhood, Signals Crypto Enforcement Amid Regulatory Debate

May 6, 2024, 10:22 PM

The U.S. Securities and Exchange Commission (SEC) has issued a Wells Notice to Robinhood, signaling a potential enforcement action against the company's cryptocurrency ventures. This move is part of what some critics, including Robinhood's CEO Vlad Tenev and former SEC commissioner Dan Gallagher, now CLO of Robinhood and appointed by Obama, describe as an overreach that stifles innovation and harms American companies and consumers. They argue that the SEC's aggressive stance, including recent rule proposals on predictive data analytics, represents an improper attempt by the administrative state. In response, legislation such as the FIT for the 21st Century Act has been introduced to provide regulatory clarity.