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Robinhood struggles with SEC investigation

TL;DR

TL;DR Breakdown

• Cryptocurrency platform Robinhood delays its IPO project to July.
• The company is investigated by the SEC for high-risk investments.

One of the significant cryptocurrency trading websites, Robinhood, has been under investigation by the SEC. The US regulator opens an investigation into its initial public offerings. The North American Securities and Exchange Commission questions the platform’s operation, believing it supports organized crime.

According to some reports, the SEC’s actions against Robinhood are causing public offering plans to be delayed. The platform has been expanding its cryptocurrencies list and improving its system.

SEC delays Robinhood IPO project

As the SEC plans to regularize Robinhood, this causes the IPO plan to be affected. According to unofficial announcements, the crypto platform IPO plan will be launched in June, but that will no longer happen. Robinhood will launch its project in the fall, probably on the first of July.

Although this investigation puts the platform in focus and delays its operations, it can be recovered. The credibility of the cryptocurrency platform is immense, which will allow it to set very well in the market.

Robinhood and regulations

Robinhood is one of the most popular crypto applications in the United States and some parts worldwide. At the beginning of the year, the platform confidentially presented an IPO registration system to the US Commission.

For March, the company did not officially mention a date for the IPO, only saying it would wait for a public offering. In this announcement, the company clarified that the process would continue after the SEC completed its review.

 After its creation in 2018, Robinhood has seen the cryptocurrency business thrive. The company has seen exponential growth in its users. It had a rise for 2020 and 2021 in the first months. The platform continued to grow even after it suspended trading with GameStop at the beginning of the year.

However, the platform not only won criticism for its measures against GameStop but high-risk investments. By January-February, the company was criticized for offering crypto services to users who had no experience. This questioned the platform’s operation in which several people agreed to say that they had no control.

By April, Massachusetts regulators tried to revoke the platform’s license as a stockbroker. This measure was made on the basis that Robinhood offered its services to inexperienced individuals and companies. Although perhaps the measure was very extreme, the US state regulators were right.

The crypto platform may have some internal problems that it will have to fix at some point. Although the company has been very supportive of cryptocurrencies somehow, it also discredits them for its investments. Robinhood has to rule out high-risk investments and only focus on using crypto for frequent users.

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Carisbel Guaramato

An avid content creator for over 4 years, Carisbel spends her time on blogs and technology news. She honed her skills as a social communicator and now finds crypto and blockchain news events worldwide for transmission through Cryptopolitan's neutral and incisive way.

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