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The Digital Chamber Criticizes SEC’s Wells Notice to Robinhood Crypto
The Digital Chamber, a digital asset sector trade association, has criticized the SEC for issuing a Wells notice to Robinhood Crypto. In a statement issued on May 6, the group expressed “profound disappointment and concern” about the notice, calling it an example of regulatory overreach.
The Digital Chamber highlighted its ongoing resistance to the SEC, accusing the agency of expanding its scope without proper authorization from Congress. The association urged for immediate legislative action to clarify regulatory jurisdiction over cryptocurrency, and demanded that SEC Chairman Gary Gensler testify before Congress.
Supporting Robinhood, the Digital Chamber commended the company for its compliance efforts and attempts to register with the SEC. The association stated its readiness to assist Robinhood Crypto and other affected companies in finding a resolution that protects their operations and innovation, as well as defending the rights of digital asset users and entrepreneurs nationwide.
While the Digital Chamber did not announce plans to file an amicus brief in support of Robinhood, it noted its previous filing in support of crypto exchange Kraken.
The SEC’s actions were criticized by the Digital Chamber for being inconsistent with its duty to protect investors, with aggressive enforcement measures impacting emerging companies and hindering investors’ ability to make independent financial decisions.
On May 4, Robinhood revealed that its subsidiary, Robinhood Crypto, had received a Wells notice from the SEC, providing further details on the matter on May 6. A Wells notice allows companies to respond to the SEC’s allegations before enforcement actions are taken, although it does not guarantee formal action.
The increased regulatory scrutiny on Robinhood Crypto comes amidst growing attention from US authorities towards the rapidly evolving crypto market. Some legal experts have referred to the ongoing issuance of Wells Notices to companies like Robinhood, Uniswap, and Consensys as a “carpet bombing campaign” against the crypto sector, warning of potential operational and legal challenges for affected companies.
In related news, Robinhood’s Bitcoin holdings have surpassed $9.5 billion, ranking third behind Bitfinex and Binance.
