Robinhood Receives SEC Wells Notice

The Breakdown First Five - Tuesday, May 7, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Invesco ETH ETF Delay

The SEC have delayed their decision on the Invesco Galaxy spot Ethereum ETF, surprising exactly no-one. There’s now no more applications awaiting a decision until May 23rd, when the SEC will be forced to make a final decision on the VanEck product. No one expects approval. Everyone expects lawsuits. 

4. Secret Nigerian Settlement

Binance CEO Richard Teng has claimed the Nigerian government tried to coerce executives into a secret $150M settlement paid in crypto before detaining them. He said that Nigeria has now “set a dangerous new precedent for all companies worldwide” following the arrests. Teng said that prior to arriving in Nigeria, the executives had received “multiple assurances that they would be granted safe passage for their meetings.”

3. GBTC Inflows

They did it again. Grayscale saw $3.9M worth of inflows on Monday, making it two trading days in a row. With more than $66M in inflows over the past two days, GBTC has just $17.5B left to go to recover their AUM from January. Overall flows were very positive for the day, totaling $217M with Fidelity leading the way with $99M. 

2. CFTC: 2 Years of Enforcement

CFTC Chair Rostin Benham said the industry should expect another cycle of enforcement action over the next six to 24 months. As the crypto cycle brings in more retail investors, Benham said that without legislation on the books we’re ”going to continue to see this fraud and manipulation." It’s unclear whether the CFTC will actually go after the frauds this time around, or just continue to sue good faith DeFi platforms that don’t have a licensing framework. 

1. Robinhood Wells Notice

Robinhood crypto has become the latest crypto firm to receive a Wells notice from the SEC, warning them of enforcement action. Their disclosure suggests the allegations will be failing to register as a broker dealer and clearing agent. No crypto firm tried harder to ‘come in and register’, going through a pointless 16 month application process in 2021. Robinhood even delisted tokens named in other SEC lawsuits. We’re past regulation by enforcement, it’s now regulation by intimidation.