The US Securities and Exchange Commission (SEC) has issued a Wells Notice to Robinhood’s crypto business for its alleged violation of federal securities laws, according to a filing.Robinhood Will Fight BackThe SEC Casts A Wide NetOffshore Options Looking Better
Like previous cases, the SEC’s recent notice to Robinhood has sparked controversy among the crypto members. Jake Chervinsky, CLO of Variant Fund, is critical of the SEC’s approach to crypto regulation.
In a series of tweets on X, Chervinsky suspects the SEC might be misusing the Wells Notice process. A Wells Notice is meant to inform a company of potential legal action, but it appears thar the SEC might be using it more as a scare tactic to pressure companies without a real intention of following through with lawsuits.
Chervinsky argues the SEC dedicates too many resources to regulating cryptocurrency. This focus on crypto takes away from the SEC’s ability to fulfill its core mission: to regulate traditional financial markets like stocks and bonds.
Under SEC Chair Gary Gensler, the commission has brought enforcement actions against several major crypto firms, including troubled firms like FTX, Genesis, and Terraform Labs. These actions have sparked debate, with some crypto industry participants arguing that the SEC’s interventions came after these firms’ collapses, leaving investors without recourse.
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Author: Nicholas Say
