The U.S. Securities and Exchange Commission (SEC) issued a subpoena to Robinhood’s (NASDAQ: HOOD) digital asset division following the collapse of the FTX exchange, a new regulatory filing has revealed.
“In December 2022… we received an investigative subpoena from the SEC regarding, among other topics, RHC’s [Robinhood Crypto] cryptocurrency listings, custody of cryptocurrencies, and platform operations,” the company revealed in its 10-K filing.
The company received a similar subpoena from the California Attorney General’s office seeking information about the company’s “trading platform, business and operations, custody of customer assets, customer disclosures, and coin listings.”
Robinhood is cooperating with both probes, it said.
While the subpoena is only now becoming public, it’s one of many efforts by U.S. regulators to shore up the country’s digital asset industry after last year’s mega collapses by some of the biggest players.
Started off by the collapse of Terra’s LUNA and UST tokens in May, the ‘crypto contagion’ brought down Celsius Network, Three Arrows Capital (3AC), BlockFi, Core Scientific, Voyager Digital, and towards the end of the year, FTX. Several other giants are hanging on by the skin of their teeth, not least of which was the Digital Currency Group, whose portfolio companies such as Genesis have been hard hit.
While regulations that protect consumers are always welcome, U.S. regulators dropped the ball, and the last-ditch efforts will do little to reassure investors who lost billions of dollars in 2022.
As the SEC, CFTC, and other U.S. regulators continue to blame the nascent nature of digital assets for their oversight failures, other watchdogs worldwide are leading the way. In Asia, countries like Japan, Korea, the Philippines, Singapore, and Hong Kong have regulatory frameworks that promote innovation while protecting investors.
The resumption of withdrawals by FTX Japan as U.S. investors’ plight remains in limbo is the best illustration of just how far behind the U.S. is in Bitcoin regulations.
Back to Robinhood, the SEC probe comes at a time when trading volume on Robinhood Crypto dipped drastically amid last year’s bear market. In Q4, revenue from digital asset trading dipped 24% to $39 million.
The company, which delisted BSV in January, is also scrambling to buy back the shares held by Sam Bankman-Fried, the disgraced founder and CEO of FTX.
Watch: Law & Order Regulatory Compliance for Blockchain & Digital Assets
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