Robinhood shares climbed 2.5% in premarket trading following the U.S. Securities and Exchange Commission’s (SEC) decision to end its investigation into the trading platform’s crypto services and activity reporting. The announcement marks another shift in crypto regulation under the SEC’s evolving oversight approach in 2025.
SEC Drops Case Against Robinhood
Robinhood’s Chief Legal and Compliance Officer, Dan Gallagher, confirmed the SEC’s decision in a February 24 blog post, stating that the agency no longer intends to pursue enforcement action against the company’s digital asset services. Robinhood received the SEC’s notice of intent last Friday, effectively closing the case.
This move aligns with the SEC’s broader shift in its crypto enforcement strategy, with the commission reportedly dropping cases against Coinbase and OpenSea while also pausing litigation with Binance and its founder, Changpeng Zhao (CZ).
Crypto Industry Gains Ground in Regulatory Battles
Gallagher, a former SEC commissioner and one-time contender for the White House’s crypto czar role, hailed the SEC’s decision as a milestone victory for the crypto industry. He argued that the ruling reinforces the long-standing position that most digital assets do not fall under U.S. securities laws.
“Instead of regulation by enforcement, it’s time for the SEC to turn to regulation by regulation,” Gallagher stated, emphasizing the need for clearer regulatory frameworks for the digital asset market.
SEC’s Changing Approach to Crypto Regulation
Under the leadership of former SEC chair Gary Gensler, the commission took a hardline stance on crypto, filing nearly 120 enforcement actions—almost twice the number of cases initiated by his predecessor, Jay Clayton. Gensler’s classification of most cryptocurrencies as securities led to frequent clashes with industry leaders and lawmakers.
However, a policy pivot has been evident since President Donald Trump’s return to office, with the SEC adopting a more crypto-friendly stance under Acting Chair Mark Uyeda. Uyeda’s new Crypto Task Force has already revisited Ethereum staking regulations, restructured the SEC’s crypto investigation unit, and dropped several high-profile cases against digital asset operators.
A New Era for Crypto Oversight?
With the SEC pulling back on aggressive enforcement, industry participants anticipate a more constructive regulatory framework for cryptocurrencies. While questions remain about long-term policy directions, Robinhood’s case closure suggests a shifting regulatory environment—one that could favor clearer guidelines over legal battles in the crypto space.
