Sign in Subscribe
Analysis

SEC warning letter to Robin Hood, Bitcoin drops...crashes to $6.4k.

Bitcoin collapsed to $64,000 on news that the Securities and Exchange Commission (SEC), the U.S. securities regulator, has sent a “wealth notice” to Robin Hood, the mecca of American ants (retail investors), regarding cryptocurrency (virtual currency) trading. Bitcoin is currently trading at...

SEC warning letter to Robin Hood, Bitcoin drops...crashes to $6.4k.

Bitcoin collapsed to $64,000 on news that the Securities and Exchange Commission (SEC), the U.S. securities regulator, has sent a “wealth notice” to Robin Hood, the mecca of American ants (retail investors), regarding cryptocurrency (virtual currency) trading. Bitcoin is currently trading at $63,279 on CoinMarketCap, a global coin marketplace, down 1.09% from 24 hours ago. On the day, Bitcoin traded between a high of $65,494 and a low of $62,746.

Bitcoin broke above the $65,000 mark, but reversed course after the SEC sent a Wells Notice to Robinhood. A Wells Notice is an advance notice from the SEC to a company or individual that is the subject of a civil action, demanding an explanation. It is an advance notice from the SEC to a company or individual suspected of engaging in illegal financial transactions, giving them an opportunity to respond before filing a lawsuit.

Well means defense counsel. It means that the SEC will give the company or individual a chance to defend itself against allegations that it engaged in illegal financial transactions, and if the defense is insufficient, a formal lawsuit will be filed. In other words, the SEC sent Robinhood a warning letter. This news seems to have reversed Bitcoin's decline. As Bitcoin has fallen, so have most other cryptocurrencies.

Read next