Robinhood Markets revealed that it has received a subpoena from the U.S. Securities and Exchange Commission investigating the cryptocurrency listing, custody and platform operations of its digital asset business.
In a 10-K filing, the broker said it received investigative subpoenas in December, a month after cryptocurrency exchange FTX filed for bankruptcy, along with "several other major cryptocurrency trading and lending venues." That includes three Arrows Capital, Voyager Digital Holdings and Celsius Network after the platform filed for Chapter 11 bankruptcy in early 2022. The investigating subpoena is related to its cryptocurrency listing and custody services, which they say was a response to last year's cryptocurrency bankruptcy: “In December 2022, following the 2022 Crypto Bankruptcies, we received an investigative subpoena from the SEC regarding, among other topics, RHC’s supported cryptocurrencies, custody of cryptocurrencies, and platform operations."
In April 2021, Robinhood received a subpoena from the California Attorney General's Office seeking information regarding its cryptocurrency division's trading platform, business and operations, custody of client assets, and token listings. On Aug. 2, Robinhood’s crypto arm was fined $30 million by the New York Financial Services District for failing to “dedicate appropriate resources and attention to developing and maintaining a culture of compliance.”
In August 2021, the brokerage also came under scrutiny by the Massachusetts Department of Securities for allegedly targeting inexperienced investors.
An investigative subpoena is issued by a court at the request of another person or entity to obtain information necessary to decide whether to take legal action against the subpoenaed person or entity.
