SEC Closes Robinhood Crypto Investigation Amid Regulatory Shift

New York, NY – The Securities and Exchange Commission (SEC) announced on Monday it has officially closed its investigation into Robinhood‘s crypto division, signaling a potential shift in regulatory practices for digital assets. This decision arrives on the heels of a similar move to terminate an enforcement case against the company, reflecting a new approach under SEC leadership.

Robinhood disclosed the SEC’s correspondence in a statement, indicating that the agency has no intention of proceeding with enforcement actions related to its cryptocurrency platform. Dan Gallagher, Robinhood’s chief legal officer, expressed gratitude for the closure, stating, “We appreciate the formal closing of this investigation, and we are happy to see a return to the rule of law and commitment to fairness at the SEC.”

This development comes after Robinhood faced warnings in May 2024 regarding potential violations of securities laws linked to its crypto offerings. The SEC had previously issued a subpoena concerning Robinhood’s cryptocurrency listings, custody practices, and platform operations. Gallagher emphasized the company’s compliance with federal laws, asserting, “Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities.”

While shares of Robinhood initially rose following the announcement, they later closed down 3.2% amid a broader market pullback. Despite this fluctuation, the company’s recent financial performance has shown strong growth, with significant contributions from its crypto services. In 2024, Robinhood reported a net total revenue of $2.9 billion, with 58% attributed to its crypto activities, helping to generate a net income of $1.4 billion.

The SEC’s recent actions, including the closure of investigations into Robinhood and competitor Coinbase, suggest an overarching shift in regulatory strategy for the cryptocurrency sector. This change aligns with campaign promises made by President Donald Trump, who has signaled a desire for a more favorable regulatory environment for cryptocurrency.

Prior to this shift, the SEC, under former chair Gary Gensler, was criticized for its aggressive stance towards crypto regulation, often described as a regulation-by-enforcement approach. The agency targeted multiple major crypto exchanges, with investigations into Coinbase and Binance among the notable cases. However, recent developments indicate that these stringent measures may be loosening.

Since Mark Uyeda was appointed as acting chair of the SEC in January 2025, there has been a marked decline in enforcement actions against cryptocurrency firms. Gallagher noted that the previous regulatory atmosphere influenced Robinhood’s decision-making regarding the types of products and services offered to users, indicating a cautious approach spurred by the SEC’s scrutiny.

As the agency re-evaluates its stance on cryptocurrency, industry insiders remain optimistic. Johann Kerbrat, head of Robinhood’s crypto division, remarked back in January, “We can be a major player” as the potential for more favorable regulations looms on the horizon.

The SEC’s closures of multiple investigations targeting crypto firms signify a critical moment for the industry, drawing attention from former SEC officials. John Reed Stark, a crypto critic and former chief of the SEC’s Office of Internet Enforcement, expressed concern over the implications of this broader regulatory shift. He stated, “When the crypto contagion spreads across the global capital marketplace like wildfire, ask not for whom the bell tolls; it tolls for thee.”