The US securities regulator has issued retail brokerage Robinhood with a notice that it may face enforcement action related to its cryptocurrency business.
Robinhood Crypto has previously received investigative subpoenas from the Securities and Exchange Commission regarding its “cryptocurrency listings, custody of cryptocurrencies, and platform operations”, but the company said in a regulatory filing on Monday that it had received a so-called Wells Notice on May 4 from the regulator.
Staff of the SEC had advised Robinhood it had made a “preliminary determination” to recommend enforcement action against the company, according to the filing. The recommendation may involve an injunction, civil money penalties and censure and limitations on activities, among other potential actions.
Robinhood shares were up about 1 per cent shortly after Wall Street’s opening bell on Monday, reversing declines during pre-market trading.
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