Robinhood CEO says SEC unwilling to facilitate crypto industry despite 'good faith'
Tenev made the statement during a CNBC interview on May 9, where he also discussed the significant increase in crypto trading on the platform and the SEC’s recent Wells Notice against the firm’s crypto unit that claims it is selling unregistered securities.
Regulatory hurdles
Robinhood’s crypto trading volumes surged 224% in the first quarter. Despite this growth, Tenev disclosed that the company’s discussions with the SEC had stalled after 16 meetings without any progress as the regulator did not engage in productive discourse.
Tenev explained during the interview:
“We tried to create what we call a special purpose broker-dealer for transacting in crypto assets… Unfortunately, a clear path forward with the SEC never emerged, and they did not reciprocate our efforts.”
The failed discussions ultimately resulted in the SEC issuing a Wells Notice against the firm, indicating potential enforcement actions for alleged securities violations.
Tenev expressed disappointment over the SEC’s decision to halt discussions and highlighted the regulator’s preference for “regulation by enforcement” rather than adapting its rules to facilitate the evolving crypto industry.
He argued for regulatory adjustments to permit brokers to incorporate digital assets, a move he believes the SEC is currently reluctant to make.
Tenev added that the SEC has the ability to change the regulatory framework for crypto but there seems to be no intent to do so from the regulator.
Importance of access
The Robinhood CEO framed the situation as a broader issue of consumer rights, stressing the importance of crypto and the necessity for Americans to have unfettered access to them.
Tenev said the firm does not agree with keeping Americans out of the crypto industry, especially as it is becoming “more and more important.”
The Wells Notice against Robinhood marks a significant moment in the broader discussion on how financial regulatory bodies should manage the growing crypto market.
The conflict with the SEC places Robinhood at the center of a critical debate over the future of crypto regulation and the role of traditional financial oversight in an increasingly digital economy.
