Investigations discontinued: Coinbase and Robinhood breathe a sigh of relief
The US Securities and Exchange Commission (SEC) has closed its investigations into the crypto divisions of Robinhood and the crypto exchange operator Coinbase. A clear sign of a regulatory change of course under the new Trump administration and actually a reason to celebrate. But investors are still not in a party mood.
As Robinhood announced on Monday, the company received a letter from the SEC on Friday in which the agency confirmed the closure of the investigation without taking any further action. Before the weekend, Coinbase CEO Brian Armstrong had already announced in a CNBC interview and on X that the SEC had closed the investigations against his company.
An official statement from the authority is still pending. However, there had already been speculation in the industry that the already controversial proceedings for alleged violations of US securities laws by the two companies could be dropped after the change of government. During the election campaign, President Donald Trump had promised regulatory relief for the crypto industry in the USA.
Under Trump's leadership, the SEC has already begun to loosen its crypto-related regulations. The agency has set up a working group to focus on clarifying the regulatory framework for digital assets and has withdrawn key accounting guidelines.
In May 2024, Robinhood received a so-called "Wells Notice" - an indication that the SEC was planning a lawsuit for possible violations of securities laws. The SEC argued at the time that cryptocurrencies should be classified as securities and that platforms such as Robinhood and Coinbase therefore operated as unregistered securities exchanges. Coinbase had already sued the authority in 2023 over similar allegations.
Dan Gallagher, Robinhood's Chief Legal and Compliance Officer, commented on the closure of the investigation in clear terms: "This investigation should never have been opened." He stressed that Robinhood Crypto has always respected U.S. securities laws and has never permitted securities transactions.
Industry experts view the development positively. Scott Acheychek, COO of REX Financial, described the discontinuation of the investigations to the Reuters news agency as a "promising development for the crypto industry" that indicates a shift towards clearer regulatory guidelines and away from the previous approach of "regulation through enforcement action" under previous SEC Chairman Gary Gensler.
Finally ClarityThis is undoubtedly good news for Robinhood and Coinbase. A long, expensive legal battle with the SEC is now off the table and they can continue their lucrative crypto business in the USA without any restrictions.
However, Coinbase's initial joy was already dampened on Friday by a serious hacker attack on industry colleague Bybit. At Robinhood, too, the joy was short-lived on Monday: in a tense overall market, the share ultimately closed US trading around three percent lower.
On Tuesday morning, significant losses in Bitcoin and other stocks overshadowed the groundbreaking SEC decision. As a result, Coinbase lost around 4.5 percent in early pre-market trading in the US, while Robinhood lost a good five percent. However, investors should not be unsettled by the short-term weakness, as the end of the SEC investigations removes a huge uncertainty factor from the companies.
DER AKTIONÄR therefore remains bullish on the current recommendations. As is well known, Robinhood is even in the real money portfolio and is up around 118 percent there.
Note on conflicts of interest: Robinhood shares are held in a real depot of Börsenmedien AG.
Gerd Weger has been successfully active on the markets since the 1980s and is known to many stock market traders as a columnist for €uro am Sonntag or as the operator of his legendary "Millionaire Depot". In 2017, he shifted his focus from stocks to cryptocurrencies and has now published a standard work: The focus is on the valuation factors of Bitcoin and Co. The completely different approaches to fundamental analysis compared to stocks are systematically presented in the book. The considerations for tax optimization are also important. For enlightened investors and traders, all of this is essential for sustainable investment success with cryptocurrencies.
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