The Digital Chamber, a trade association representing the digital asset sector, has strongly criticized the Securities and Exchange Commission (SEC) for issuing a Wells notice to Robinhood Crypto.
In a statement released on May 6th, the Digital Chamber expressed profound disappointment and concern regarding the SEC’s latest action, describing it as an instance of regulatory overreach.
The association highlighted its ongoing resistance to the SEC’s expanding regulatory scope, which it believes lacks congressional authorization. It accused the SEC of overstepping its bounds and interfering with Congress’s deliberation of legislation to clarify regulatory jurisdiction over cryptocurrencies.
Calling for immediate legislative action to resolve jurisdictional issues, the Digital Chamber demanded that SEC Chairman Gary Gensler testify before Congress.
The Digital Chamber voiced support for Robinhood, commending the company’s efforts towards good-faith compliance and its attempts to register with the SEC.
The association stated its readiness to assist Robinhood Crypto and other affected companies in seeking a resolution that protects their operations and innovation, while also defending the rights of digital asset users and entrepreneurs nationwide.
While the Digital Chamber did not explicitly state its intention to file an amicus brief in support of Robinhood, it referenced its previous filing in support of crypto exchange Kraken as an example of its advocacy efforts.
Moreover, the Digital Chamber criticized the SEC’s actions as inconsistent with its duty to protect investors, arguing that aggressive enforcement measures hinder emerging companies and diminish investors’ ability to make independent financial decisions.
Robinhood Crypto disclosed on May 4th that it had received a Wells notice from the SEC, with further details provided in a subsequent post on May 6th. A Wells notice permits companies to respond to the SEC’s allegations before any enforcement actions are taken, although it does not guarantee that formal action will follow.
This latest legal challenge for Robinhood Crypto occurs amidst increased regulatory scrutiny from U.S. authorities targeting the rapidly evolving crypto market. Some legal experts have likened the ongoing issuance of Wells notices to companies like Robinhood, Uniswap, and Consensys to a “carpet bombing campaign” against the crypto sector, warning of potential overreach and significant operational and legal repercussions for affected companies.
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