Robinhood Stock Pops as SEC Investigation Into Crypto Arm Wraps. Why That Matters. — Barrons.com

By Emily DattiloThe U.S. Securities and Exchange Commission has officially closed its investigation of Robinhood Crypto, sending shares of the brokerage firm higher on Monday.Robinhood Markets stock gained 1.9% to $52.60 in morning trading, as investors cheered the latest sign of a less restrictive regulatory environment.The SEC informed Robinhood Crypto in a letter Friday that it had wrapped up the investigation and didn't intend to move forward with an enforcement action.Last spring, the company said it received a "Wells Notice" from the regulator, saying that SEC staff had made a "preliminary determination" to recommend to the agency's commissioners that it file an enforcement action, alleging violations.The SEC has long argued that cryptocurrencies are securities, making them subject to its regulatory oversight. It has said Robinhood and other cryptocurrency-trading venues are operating unregistered securities exchanges — an argument Robinhood has rejected."We applaud the staff's decision to close this investigation with no action," said Dan Gallagher, Robinhood's chief legal, compliance and corporate affairs officer in a press release. "Let me be crystal clear — this investigation never should have been opened."In similar news, last week, the SEC said it was ready to drop its lawsuit against Coinbase Global, which aimed to regulate the cryptocurrency exchange as a stock exchange.Write to Emily Dattilo at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.