The Digital Chamber criticizes SEC for Wells Notice against Robinhood

The Digital Chamber, a crypto trade association, criticized the SEC for issuing a Wells notice to Robinhood Crypto.

In a statement on May 6, the association expressed its “profound disappointment and concern” over the action, labeling it as an instance of regulatory overreach.

The Digital Chamber reiterated its opposition to the SEC’s extension of authority without Congress’s approval, emphasizing that Congress is currently discussing legislation to clarify regulatory jurisdiction over crypto. The association accused the SEC of bypassing this legislative process.

To address jurisdictional concerns, the Digital Chamber called for “immediate legislative action” and demanded that SEC Chair Gary Gensler testify before Congress.

Support for companies and investors

The Digital Chamber defended Robinhood, acknowledging the company’s efforts towards compliance and registration with the SEC.

Stating that “The Digital Chamber stands ready to support Robinhood Crypto and other affected companies…,” the association did not explicitly mention plans to file an amicus brief in defense of Robinhood, although it noted previous instances of doing so, including in Kraken’s case in February.

The Digital Chamber also argued that the SEC’s actions contradict its mandate to protect investors, suggesting that aggressive enforcement could stifle innovation in new companies and limit investors’ financial autonomy.

Robinhood Crypto’s Wells notice

Robinhood revealed in an SEC filing on May 4 that its subsidiary, Robinhood Crypto, had received a Wells notice. The company provided further details on May 6.

Although the Wells notice signals the SEC’s intent to recommend enforcement action against Robinhood, no lawsuit has been filed yet.

Robinhood outlined its opposition to the SEC’s intentions, stating its plans to engage with the SEC to debunk any potential case based on factual and legal weaknesses, and asserting that the assets it deals with are not securities.

Robinhood affirmed its commitment to continue offering its crypto services.

Mentioned in this articlePosted In: US, Regulation

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