SEC Ends Robinhood Investigation ‘With No Action’

The U.S. Securities and Exchange Commission has ended its investigation into trading platform Robinhood Crypto “with no action,” the company said in a statement.

According to the firm, the SEC’s Enforcement Division advised Robinhood Crypto that “it had concluded its investigation and did not intend to move forward with an enforcement action,” after sending the company a Wells Notice in May 2024 notifying it of a pending enforcement action.

An SEC spokesperson told Decrypt that the regulator declines to comment on the matter.

In a statement, Robinhood Markets’ head of legal and compliance, Dan Gallagher, said that “this investigation should never have been opened,” arguing that the firm “never allowed transactions in securities.”

“Instead of regulation by enforcement, it’s time for the SEC to turn to regulation by regulation—providing market participants with clarity and an appropriate regulatory framework for digital assets,” Robinhood added in its statement.

For a time, Gallagher was floated as a potential replacement for former SEC Chair Gary Gensler. But he made it very clear that it was a nonstarter.

“It is always an honor to have your name in the mix for an incredibly important job like SEC Chairman,” Gallagher told Decrypt in a statement. “However, I have made it clear that I do not wish to be considered for this position.”

The conclusion of the SEC’s Robinhood investigation mirrors what the industry has seen in a number of such cases in recent days. Last Friday, the regulator ended its investigation into NFT marketplace OpenSea, just hours after reaching an agreement in principle to drop charges against crypto exchange Coinbase.

Since the inauguration of U.S. President Donald Trump, the SEC has shifted its stance towards crypto, launching a new task force under crypto-friendly commissioner Hester Peirce, and rescinding its Staff Accounting Bulletin (SAB) No. 121, which critics argued created unnecessary complexity for crypto platforms.

The called off investigation aligns with promises the president made during his campaign to create a more favorable approach to crypto regulation than the previous administration’s “regulation-by-enforcement” strategy under former SEC Chair Gary Gensler.

Shares in Robinhood saw a slight bump in premarket trading, up 2.4% per Yahoo Finance, after having closed Friday down 7.9% from open.

Crypto has become increasingly important to Robinhood’s business model, with almost half of its $672 million transaction-based revenue in the fourth quarter coming from crypto trading—a 700% increase as Bitcoin rallied beyond $100,000 in step with Trump’s electoral victory.

Editor’s note: This story was updated to include comment from the SEC.

Edited by Stacy Elliott.