Robinhood on Monday said that the SEC has closed its investigation into Robinhood’s crypto unit and will not pursue action.
This follows Coinbase saying on Friday that the SEC has dropped its lawsuit against it.
The SEC, under former chair and crypto hawk Gary Gensler, was looking into a number of crypto exchanges over how they treated crypto assets such as staking.
Staking involves committing (or, some might describe it, loaning) crypto assets to support the blockchain network so the network can confirm transactions, with potential rewards such as earning more crypto.
Gensler’s SEC viewed staking as a security and alleged that exchanges that provided this service were trading in unregistered securities. The exchanges disagreed and also argued that the SEC and/or legislators haven’t established crypto regulations to justify such enforcement actions.
Coinbase, which the SEC had sued, opted to fight. Robinhood chose to avoid trading the crypto assets that seemed to trigger the SEC the most, although it did launch a staking service in Europe. The SEC had not filed a lawsuit against Robinhood, but in May Robinhood said the SEC sent a Wells Notice, which indicated a suit was pending.
The crypto industry, particularly exchanges like Coinbase and Robinhood, say they want to use this moment under a newly crypto-friendly Trump administration to create regulations. Certainly, the crypto industry has had its share of buyer-beware issues. Whether the industry will adopt common-sense regulations or backslide into another Wild West era remains to be seen.
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