- Robinhood was subpoenaed by the SEC last year over its listing criteria and crypto storage
- The exchange didn’t reveal any more details about the demand
- Robinhood was fined $30 million last year for various failings
Robinhood has revealed in a Securities and Exchange Commission (SEC) filing that it was issued with a subpoena by the agency last year over its crypto listing and custody policies in the wake of the collapse of FTX and other high profile entities. Investigative subpoenas are issued by courts at the request of another person or entity in order to obtain information necessary to decide whether to pursue legal action against it, but Robinhood has not publicized what it was asked by the SEC or its responses.
10-K Form Reveals Small Insights
It doesn’t take a degree in rocket science to work out the rationale and timing of the subpoena, with the SEC presumably after information on how Robinhood choses the coins it lists and delists as well as how it stores them. With the spectacular collapses in 2022 of Celsius, Voyager Digital, and, of course, FTX, the SEC is very keen on seeing if another such catastrophe is round the corner.
In its 10-K form, Robinhood did note that it is not scared of decisions that it believes better protects customers but “might cause our customers to lose confidence in us or reduce their engagement on our platform”. It gives the example of the delisting of BSV last month, which it said was an example of a fork that “does not have support from a majority of the affiliated third-party miner and developer community” and could therefore lead to security issues and potential loss of funds.
Robinhood Was Fined $30 Million Last Year
What isn’t clear however is if the subpoena came as part of an existing lawsuit or is part of an action that is yet to be announced, but what we do know of course is that last August Robinhood’s crypto division was hit with a $30 million fine by the New York District of Financial Services for failing to “invest the proper resources and attention to develop and maintain a culture of compliance.”
It may be, then, that this subpoena is related to that case in some way to see if Robinhood is improving these areas as demanded by regulators.
