🌎 Robinhood Shares Rise After SEC Ends Crypto Investigation

Robinhood Shares Rise as SEC Ends Crypto Investigation

Robinhood shares experienced a 2.5% surge in premarket hours following the U.S. Securities and Exchange Commission’s (SEC) decision to end its investigation into the crypto and equity trading platform.

The SEC announced that it does not intend to pursue further enforcement action against Robinhood for its crypto services and activity reporting, as stated by chief legal and compliance officer Dan Gallagher in a blog post on February 24.

SEC’s Shift in Crypto Regulation

The SEC’s notice of intent marks another significant turnaround in the regulator’s stance on digital assets in 2025. The commission has dropped cases against major players like Coinbase and OpenSea, and paused litigation with Binance and its founder, Changpeng Zhao.

This shift in regulatory tides is seen as a victory for the crypto industry, which has long argued that most digital assets fall outside the purview of federal securities laws.

Robinhood’s CLO Calls for Regulatory Clarity

Gallagher, who was considered for the White House crypto czar role last year, stated that the industry’s long-awaited victory reaffirms the need for regulatory clarity. He emphasized that the SEC should focus on “providing market participants with clarity and an appropriate regulatory framework for digital assets.”

“Instead of regulation by enforcement, it’s time for the SEC to turn to regulation by regulation.”

A New Era of Crypto Regulation

The new SEC leadership has quickly addressed the backlog of enforcement actions left behind by former chair Gary Gensler. During Gensler’s tenure, the commission filed over 120 cryptocurrency complaints, nearly twice the number of cases opened by his predecessor, Jay Clayton.

The SEC’s previous approach to crypto regulation was criticized for being “ambiguous and capricious.” However, with the recent pivot towards a crypto-friendly stance, the securities watchdog is revisiting staking in Ethereum funds and replacing its crypto investigation unit.

Some key takeaways from the SEC’s shift in crypto regulation include:

Regulatory clarity: The SEC should focus on providing market participants with clear guidelines and an appropriate regulatory framework for digital assets.
Reduced enforcement actions: The commission is dropping cases against major players and pausing litigation with others.
Crypto-friendly stance: The SEC’s new leadership is taking a more crypto-friendly approach, revisiting staking in Ethereum funds and replacing its crypto investigation unit.