The U.S. Securities and Exchange Commission (SEC) officially ended their investigation into Robinhood Crypto on February 21,. Robinhood Markets made this known publicly today, saying that the SEC Enforcement Division informed them in a letter.
The letter from the SEC’s Enforcement Division follows a Wells Notice issued to Robinhood Crypto last May, and Robinhood’s Chief Legal Officer, Dan Gallagher, released an official company statement, saying, “We applaud the staff’s decision to close this investigation with no action.”
SEC did not have a case against Robinhood Crypto
Dan said, “Let me be crystal clear—this investigation never should have been opened.” He explained Robinhood Crypto’s stance that at no time had the platform violated federal securities laws or allowed any trading in securities assets.
According to Dan, Robinhood Crypto had already informed the SEC repeatedly that any attempt at enforcement would not hold water legally. He further expressed relief, noting his appreciation for what he sees as the SEC’s return to fairness under the current administration.
Robinhood Crypto has had ongoing disagreements with the SEC’s claims—originally under former Chair Gary Gensler—that most crypto assets traded are subject to federal securities laws.
Robinhood chose a cautious path during Gary’s tenure, avoiding certain crypto offerings altogether. These offerings were specifically the types of crypto assets Gary’s SEC labeled as securities in enforcement actions against other platforms.
Robinhood’s careful choices were aimed at ensuring full compliance with securities regulations and avoiding possible enforcement actions.
Now that the investigation into Robinhood Crypto is officially closed, the company says it hopes for clearer regulatory policies under President Donald Trump’s administration.
Robinhood Crypto called openly for “regulation by regulation” instead of Gary’s previous “regulation by enforcement” approach.
Robinhood said its belief that defined regulatory guidelines help crypto platforms and traders alike by offering clarity and legal certainty, which they see as necessary for industry growth and customer safety.
In its statement, Robinhood Crypto mentioned tokenization specifically as a key area for innovation. According to Robinhood, clear, transparent, and predictable regulatory standards from the SEC are critical to fully unlock tokenization’s potential.
The SEC’s decision isn’t isolated. Just recently, Coinbase also saw its own SEC investigation closed. Both dismissals signal a noticeable change from Gary’s famously tough stance to a gentler regulatory style under Trump’s new leadership.
Trump promised exactly this kind of shift during his presidential campaign, openly criticizing Gary’s policies as overly harsh and unclear, especially regarding crypto.
During Gary’s tenure, crypto prices—particularly Bitcoin—had huge ups and downs. While Bitcoin prices climbed dramatically at times, hitting new highs, many crypto businesses still called Gary’s SEC period one of their worst moments.
Crypto companies said that, under Gary, SEC enforcement actions often felt random and unpredictable, lacking clear rules of operation.
Now, under Trump, Bitcoin recently soared towards the $100,000 mark for the very first time. Investor optimism seems directly linked to Trump’s promises of friendlier crypto policies. The clear dismissal of charges against both Robinhood and Coinbase could further fuel this investor confidence.
For Robinhood specifically, crypto trading is now a significant revenue driver. In its latest financial report for the fourth quarter, Robinhood revealed $672 million in transaction-based revenue.
Nearly half of this—almost $336 million—came directly from crypto transactions. This represents a massive 700% jump compared to past revenue from crypto trades alone.
Investors, clearly optimistic about future crypto-friendly policies, drove Bitcoin prices sharply higher, boosting Robinhood’s revenue significantly in recent months.
Investor excitement about Robinhood’s potential growth under a more lenient regulatory environment is clear from stock market reactions. Robinhood shares surged notably in response to positive developments. As of late February 2025, Robinhood stock climbed 38% since the beginning of the year.
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