SEC continue its war against crypto. This time Gary Gensler is going after Robinhood, more specifically Robinhood Crypto. SEC has sent a Wells Notice to Robinhood and expecting explanations or actions regarding Robinhood listing crypto assets on its platform but not registering with SEC. SEC doesn't have any issues with Robinhood's stocks trading side of business. They have made it clear that the problem is with Robinhood's crypto activities. As many of SEC actions in recent years I find this one very strange as well. Not only Robinhood is a regulated company, but it has become a publicly traded company not too long ago. I would think SEC would have done its work in timely manner and if they found any issues they would have been raised when Robinhood started adding crypto or when they declared intentions of going public.
I don't admire Robinhood at all. Both players in this story, SEC and Robinhood are not know to for their honesty and good will. I could only hope Robinhood would embrace its original vision and would embrace honesty and transparency as norm of conducting business. In this case, I kinda have to side with Robinhood. Just because they may not be at fault, and also having multiple gateways to crypto is beneficial for people. SEC has been going after exchanges in recent years. There aren't many crypto exchanges left that US citizens or residents can trade on. Even with the existing options, there are many crypto assets available for trading or investment. SEC has made it very difficult to buy or sell crypto in the US. I believe this is just a temporary obstacle and things will get better in the future. But in the meantime, this doesn't help anybody.
Wells Notices are usually issued towards the end of an investigation and when SEC is ready to take some actions. They sort of give an opportunity for a company, in this case Robinhood to respond or take actions. It is seems SEC wants Robinhood to stop its crypto part of the business. The excuses used by SEC are all same as before -"you are listing securities, cryptos are securities, you have registered them as such, hence you are wrong". The worst part is, even if Robinhood conceded that they are securities and asked for instructions how to proceed, SEC wouldn't be able to provide any. In their opinion, these are unregistered securities and shouldn't be traded, period.
Robinhood's chief legal, compliance and corporate affairs officer Dan Gallagher have expressed his opinion on the matter, and it is clear Robinhood had engaged with SEC and sought guidance on how to do crypto right. Of course, SEC doesn't respond or provide any clear guidance and instead conduct an investigation years after. SEC has been acting in such a bad faith during all this crypto war they started. They say they are for protecting consumers, eliminating scam and fraud, and creating fair markets for all. None of these really been happening. They haven't been protecting consumers. If they really wanted to, there are actual scams going on right now. They will do nothing about it. For example, remember how there are deep fake scam ads have been going on Youtube for months now? Those are still happening. Youtube and Google don't care. They earn on selling these ads. Does SEC care? Doesn't look like it. SEC is not eliminating scams and frauds. By getting rid of legit service providers and platforms, SEC is actually encouraging for scam and fraud ones to replace them. SEC is not creating fair markets. Quite the opposite. Everything seems to be anti-fair, anti-free markets. So disappointing.
This news creates another uncertainty in the market. For those who have assets in Robinhood, this uncertainty will continue for months to come if not years. We don't know what the outcome of these actions will be. Will Robinhood stop crypto trading, to protect their stocks trading business? Will Robinhood fight this in the courts? How long this will go on? Is it safe to keep assets in Robinhood now. If we listen to what Robinhood says:
Robinhood Crypto is here to stay and we’ll keep innovating, shipping products, and fighting for regulatory clarity for the good of the industry and our customers.
But we can't trust Robinhood either. There were times when Robinhood betrayed its customers. If there is money to be made, top business relationships to be established, Robinhood will abandon their duty, promises, and obligations to their customers. However, since crypto is here to stay and Robinhood profits from this market, my guess is they will fight to remain in crypto. Strange thing about SEC going after Robinhood is that Robinhood doesn't even list massive amount of coins. They amount of coins traded on Robinhood is very limited. It is not like they are a new Binance or Bittrex.
This crypto was has gone for a while now. Congress is incompetent and unable to do anything either. All of this confusion could easily be removed by actually putting in work and effort by those who were elected to create laws that are beneficial for people. We don't understand this new technology or this new money can't be an excuse any more. But there is no hope there either. Decentralized solutions seem to be the only that we can rely on at this time.