By
Steve Muchoki
May 17th, 2024
The Chamber has pledged its support to Robinhood Crypto and other affected companies in seeking a resolution that safeguards their ability to operate and innovate.
The Digital Chamber, the leading trade association representing the crypto industry in the United States, has expressed discontent with the Securities and Exchange Commission (SEC) for sending a Wells Notice to Robinhood Crypto, the company’s digital asset arm.
In an official statement, the organization voiced its disappointment and concern over this recent development. They labeled it “another example of the SEC’s regulatory overreach”, citing similar notices sent to other big industry names like Uniswap and Consensys.
A Path that Undermines Innovation
On May 4, the SEC sent a Wells Notice to Robinhood Crypto, warning the company of possible legal action regarding its digital asset operations.
According to the financial regulator, Robinhood violated federal securities laws outlined in Sections 15(a) and 17A of the Securities Exchange Act of 1934, which mandate entities dealing with securities to register as brokers and clearing agencies.
The issuance of the Wells Notice drew criticism from the Digital Chamber, which argued that the SEC’s regulatory strategy for the blockchain ecosystem does not align with its investor protection mandate. The blockchain association noted that Robinhood’s statement that it tried registering with the agency as a special purpose broker-dealer for its crypto operations demonstrates its commitment to meeting regulatory standards.
However, according to the Digital Chamber, despite this proactive step, the SEC has chosen “a path that undermines innovation” in the crypto sector. The organization stated that it has on several occasions argued, through various amicus briefs and advocacy efforts, that the SEC is overreaching its regulatory authority over the crypto economy without proper congressional authorization. The blockchain association said that while Congress is actively considering legislation that would potentially govern the entire crypto market, the SEC is busy bringing legal action against companies and countering Congress’ efforts.
Digital Chamber Calls on Congress to Address SEC’s Crypto Stance
The Digital Chamber said the SEC risks alienating innovative businesses and jeopardizing the financial independence of millions of Americans engaging with the digital economy by potentially using enforcement actions that could stifle a significant portion of the financial sector.
Given the SEC’s tough stance on crypto, the association urges Congress to establish clear regulatory frameworks to address the perceived unfair treatment of the crypto economy.
The association also called for SEC Chair Gary Gensler to appear before Congress to justify the agency’s ongoing efforts to restrict an industry crucial to the US economy.
“Additionally, SEC Chairman Gary Gensler must be called to testify before Congress to explain the rationale behind the SEC’s continued attempts to stifle an industry pivotal to our economic future,” said Digital Chamber.
Stand with Crypto
Furthermore, the Digital Chamber has pledged its support to Robinhood Crypto and other affected companies in seeking a resolution that safeguards their ability to operate and innovate.
The Blockchain Association said it is fully prepared to support these companies in challenging the SEC to defend their rights and those of other digital asset users and entrepreneurs in America.