Robinhood Crypto, LLC (RHC), a subsidiary of Robinhood Markets, received a Wells Notice from the US Securities and Exchange Commission (SEC), a filing showed on Monday.
The notice, dated May 4, 2024, indicates the SEC's preliminary decision to possibly pursue an enforcement action against RHC for alleged violations of specific sections of the Securities Exchange Act of 1934. According to the notice, the SEC may consider a civil injunctive action, public administrative proceedings, and/or a cease-and-desist proceeding against RHC.
Robinhood shares fell 7% in premarket trading in New York following the news.
