The Digital Chamber criticizes SEC over Wells notice to Robinhood Crypto

The Digital Chamber, the digital asset industry trade association, criticized the SEC for issuing the Wells notice to Robinhood Crypto.

On May 6, the group released a statement expressing “deep disappointment and concern” over the latest notification. The association also described it as an example of regulatory overreach.

The Digital Chamber underlined its ongoing resistance to the SEC, which it claims has expanded its scope without congressional authorization. He said Congress was “actively negotiating legislation” to clarify regulatory jurisdiction over cryptocurrency and accused the SEC of violating due process.

To resolve the issues surrounding the trial, the Digital Chamber called for “immediate legislative action” and insisted that SEC Chairman Gary Gensler testify before Congress.

The Digital Chamber supported Robinhood, noting the company’s well-intentioned compliance efforts and attempts to register with the SEC.

The association stated the following:

“The Digital Chamber stands ready to support Robinhood Crypto and other affected companies in their pursuit of a solution that preserves their ability to operate and innovate while also defending the rights of digital asset users and entrepreneurs nationwide.”

While he did not indicate his intention to file an amicus brief in support of Robinhood, he noted that he had done so before, citing a filing in favor of crypto exchange Kraken in February.

The Digital Chamber also claimed that the SEC’s actions were inconsistent with the regulator’s investor protection mandate, saying aggressive practices affected emerging companies and reduced investors’ capacity to make autonomous financial decisions.

On May 4, Robinhood announced that its subsidiary Robinhood Crypto had received a Wells letter from the SEC. He discussed the development in more detail in a post published on May 6.

The Wells notice allows companies to challenge the SEC’s allegations before the agency initiates enforcement actions. However, this notification does not guarantee official action.

Robinhood Crypto’s latest legal trouble comes as it faces regulatory attention from US authorities who are focusing their sights on the rapidly developing crypto market.

Some crypto advocates have called the ongoing issuance of Wells Notices to companies like Robinhood, Uniswap, and Consensys a “carpet bombing campaign” against the crypto industry. They argue that this approach could exceed the SEC’s authority and cause significant operational and legal problems for affected companies.