Legal challenges against cryptocurrency platforms under President Joe Biden’s administration are diminishing, with a notable shift reminiscent of policies from President Donald Trump’s era, which tended to favor a more accommodating approach to the crypto sector.
Just recently, Robinhood announced that the Securities and Exchange Commission (SEC) has decided to close its investigation into the company without taking any enforcement action. This announcement came after Robinhood was previously informed in May that it might face consequences due to failing to register some crypto assets available on its platform as securities.
Dan Gallagher, the chief legal, compliance, and corporate affairs officer at Robinhood Markets, expressed relief in a statement, saying, “Robinhood Crypto has always adhered to federal securities laws and has never processed transactions in securities.” He added that the SEC’s case against Robinhood Crypto was not sustainable and emphasized the welcome closure of the investigation, highlighting a return to fair legal practices at the SEC.
While the SEC has not provided any comments on the case, Robinhood’s update follows closely on the heels of similar news from Coinbase, which reported that the SEC dismissed a pending case against it, although the SEC has not confirmed this information.
In a broader context, the SEC has sought a federal court’s approval to pause ongoing legal actions against Binance, the largest cryptocurrency exchange, indicating a potential reevaluation of prior enforcement measures.
The cryptocurrency sector has long felt that it was being treated unfairly under the previous leadership of SEC Chairman Gary Gensler. This sentiment led to heavy investments in supporting Trump and other pro-crypto politicians to secure more favorable regulations and, consequently, influence the political sphere and broader financial systems.
Since Trump’s administration began, the industry has celebrated a few significant victories. These include the reversal of a previously imposed accounting regulation by the SEC, as well as an executive order from the president that called for a working group to review and recommend modifications to cryptocurrency regulations. The possible establishment of a strategic government reserve of cryptocurrencies is also under consideration to be realized within 180 days.
In response to ongoing regulatory challenges, the SEC has established a crypto task force, engaging with prominent industry stakeholders to discuss potential updates to cryptocurrency regulations.
Hester Peirce, a pro-crypto commissioner at the SEC leading this task force, recently remarked that the absence of clear regulations has allowed fraudsters to flourish while legitimate crypto initiatives face significant hurdles.
Furthermore, the SEC has introduced a new “Cyber and Emerging Technologies Unit,” which Mark Uyeda, the acting chairman of the SEC, indicated would utilize its enforcement resources more effectively in light of the evolving crypto landscape.
In market responses, shares of Robinhood Markets Inc. saw a decline of 5.2% during morning trading, reflecting a downtrend seen across the stock market.
