News - Robinhood would win lawsuit against SEC, experts say

By Mike Hesp

Robinhood would win lawsuit against SEC, experts say

Laws and regulations

A new report by investment bank KBW assumes that U.S. FinTech Robinhood would win in court if sued by the SEC.

Just two days ago received the U.S. FinTech Robinhood a so-called Wells Notice from the SEC. This is usually the last step before the US Securities and Exchange Commission formally filed a lawsuit.

The reason: the U.S. Securities and Exchange Commission accuses California FinTech of violating applicable laws related to securities regulation.

A report now published by the investment bank Keefe, Bruyette & Woods (KBW) concludes that Robinhood would win the legal dispute against the Securities and Exchange Commission, so reports the crypto portal Coindesk.

According to the report, KBW analysts were surprised by the SEC's aggressive approach because Robinhood is quite conservative with its digital asset offerings.

There are only 15 cryptocurrencies in the neobroker's portfolio. That's far fewer than many other firms offer their clients.

KBW analyst Kyle Voigt therefore writes: "We assume that nothing will change about HOOD's current crypto transactions or asset lists in the US."

Still, experts expect the SEC to follow up the Wells Notice with a formal complaint. However, KBW considers Robinhood significantly more likely to emerge victorious from the resulting legal dispute than other companies that also offer cryptocurrencies.

Analysts also assume that the SEC will not take legal action against Robinhood Crypto's entire offering, but only against individual cryptocurrencies.

Ether is a particular concern here, as the SEC repeatedly emphasizes that it is likely to be an effect. ETH makes up about 25 percent of Robinhood's crypto offerings.

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