The Digital Chamber, a crypto trading organization, condemned the SEC for serving a Wells notice on Robinhood Crypto.
In a May 6 statement, the association expressed “deep disappointment and concern” over the action, calling it an example of excessive oversight.
The Digital Chamber emphasized its continued opposition to the SEC’s expansion of its reach without congressional approval. It noted that Congress is “actively considering legislation” to define regulatory jurisdiction over crypto and said the SEC has breached the process.
To address jurisdictional issues, the Digital Chamber urged “immediate legislative action” and said SEC Chairman Gary Gensler should be forced to testify before Congress.
Support for companies and investors
The Digital Chamber defended Robinhood, recognizing the company’s self-declared good-faith compliance efforts and efforts to register with the SEC.
The association said:
“The Digital Chamber stands ready to support Robinhood Crypto and other affected companies… “
It did not explicitly describe plans to file an amicus brief in defense of Robinhood, but said it had done so in other cases in the past, highlighting its filing in Kraken’s case in February.
The Digital Chamber further alleged that the SEC’s actions violate the regulator’s investor protection mandate, noting that aggressive enforcement harms new businesses and reduces investors’ ability to make autonomous financial decisions.
Robinhood Crypto received a notice from Wells
Robinhood disclosed in a May 4 SEC filing that its subsidiary, Robinhood Crypto, had received notice from Wells. It further commented on the development in a May 6 notice.
Wells’ message indicates that the SEC plans to recommend enforcement action against Robinhood. However, the SEC has not yet filed a lawsuit.
Robinhood nevertheless described how it might oppose the SEC’s intentions. The company said it plans to engage with the SEC to demonstrate the weakness of each case in terms of the facts and the law. It also claimed that the assets it lists are not securities.
Robinhood said it will continue to offer its crypto-related services.