SEC prepares to sue Robinhood over its crypto unit

Robinhood disclosed that its crypto unit received a "Wells notice" from SEC staff over violations of securities laws.

Following the notice, SEC could sue to prevent the company from trading certain crypto assets which they claim are securities. It is not yet clear which tokens offered by Robinhood were considered securities by the SEC.

Firms that receive Wells notices are allowed to respond and tell the agency why it shouldn’t proceed with a civil lawsuit. Two more companies have received notices by the SEC this year, Uniswap Labs and Consensys makers of MetaMask Wallet.