The Morning Risk Report: Robinhood Markets Says SEC Closes Investigation of Crypto Unit By David Smagalla

Good morning. Robinhood Markets said the Securities and Exchange Commission closed its investigation into its crypto unit and doesn't intend to pursue enforcement action, the latest indication of the Trump administration's support for the cryptocurrency space.

The online brokerage said the SEC's enforcement division advised the crypto unit, called Robinhood Crypto, of its decision on Friday. The SEC in May said it was preparing to sue the crypto unit, which received a so-called Wells Notice around that time, when the regulator was still led by former Chair Gary Gensler.

Pivoting to crypto expansion: The SEC's decision will buoy Robinhood as it banks on a major expansion of its cryptocurrency trading business under a more supportive Trump administration as it continues to diversify beyond traditional brokerage services.

Background: Menlo Park, Calif.-based Robinhood and other companies with crypto operations remained in the crosshairs of the SEC under Gensler. The SEC had levied a series of regulatory penalties on the firm since 2020.

Regulatory changes help: Now that President Trump has chosen crypto ally Paul Atkins to succeed Gensler, Robinhood wants to pick up the pace. "Currently, there is a more innovation-friendly stance on crypto, and that's going to help that part of our business undoubtedly," Chief Financial Officer Jason Warnick said. Compliance

New U.S. sanctions target Iran's oil supply chain amid Trump's 'maximum pressure' push.

The U.S. is ratcheting up sanctions targeting Iran's oil supply chain, continuing the Trump administration's "maximum pressure" campaign to effectively blockade the country's petroleum exports, the Treasury Department said.

More than 30 entities, individuals and vessels connected with Iran's so-called shadow fleet have been hit with new U.S. sanctions, Treasury said Monday. The sanctioned entities include oil brokers in the United Arab Emirates and Hong Kong, tanker operators and managers in China, and the head of Iran's state-owned oil company.

Crypto exchange OKX agrees to pay over $500 million for violating U.S. law.

The company behind OKX, one of the world's largest cryptocurrency exchanges, admitted on Monday that it had illegally served U.S. customers and agreed to pay a penalty of more than half a billion dollars to resolve a federal investigation.

The charges. Aux Cayes Fintech, a Seychelles-based company that the Justice Department described as the operator of OKX, pleaded guilty to one count of running an unlicensed money transmitting business, federal prosecutors said. Because of its failure to comply with anti-money laundering laws, OKX was used to facilitate over $5 billion worth of "suspicious transactions and criminal proceeds," Matthew Podolsky, the acting U.S. Attorney for the Southern District of New York, said in a statement.

Elizabeth Holmes lost her bid to overturn her conviction, leaving the founder of the defunct blood-testing technology startup Theranos with few remaining legal options.

Justice Department lawyers-facing scores of lawsuits spurred by President Trump's blitz of executive actions-have at times struggled on questions of law and fact about what President Trump and his lieutenants are actually doing, drawing frustration and rebukes from judges across the country.

Judges in the EU's Court of Justice have said that Google's refusal to let Enel host an electric-vehicle charging app on its Android Auto platform might break EU competition rules . Risk

The U.S. economy depends more than ever on rich people.

Many Americans are pinching pennies, exhausted by high prices and stubborn inflation. The well-off are spending with abandon .

The top 10% of earners now account for 49.7% of all spending, a record in data going back to 1989, according to an analysis by Moody's Analytics. Three decades ago, they accounted for about 36%.

Impact. This means that economic growth is unusually reliant on rich Americans continuing to shell out. Mark Zandi, chief economist at Moody's Analytics, estimated that spending by the top 10% alone accounted for almost one-third of gross domestic product. A stock market selloff or decline in home values that rattles the confidence of the top 10% and causes them to cut back would have a significant effect on the economy.

U.S. to hit Chinese ships with hefty port fees.

The U.S. trade war with China is escalating beyond tariffs with a plan by the Trump administration to impose steep fees on Chinese shipping companies and any Chinese-built vessels that enter U.S. ports.

The proposal, unveiled on Friday by the office of the U.S. Trade Representative, would impose millions of dollars in new fees each time one of these vessels enters a U.S. port, adding costs that would likely be passed down to U.S. importers and exporters through higher freight rates.

Chinese Manufacturers Speed Up Efforts to Dodge Trump Tariffs America's economic activity lost pace at the start of the year, according to a monthly index set out Monday.

The Trump administration's move to terminate millions of square feet of federal leases and sell government buildings threatens to weaken a fledgling recovery in the U.S. office market, from California to Washington, D.C.

The U.S. sided with Russia and China to win the United Nations Security Council's backing for a resolution crafted in Washington that didn't blame Moscow for the Ukraine war and called for a swift end to the conflict, as President Trump said he was in talks with Russia about an economic-development deal.

The leaders of China and Russia sought to project a unified front on the third anniversary of the Russian invasion of Ukraine amid U.S. overtures to Moscow seen as attempts to pry the two powers apart.

Sunday's German election could be the last chance for Europe's centrist rulers, under assault from populist parties and an antagonistic U.S. administration, to show they can solve the region's piling problems.

Germany's economy contracted in the final quarter of 2024 , the country's statistics agency confirmed Tuesday, underlining the scale of the challenge for the next German government to turn around its economic fortunes.

Passenger-car registrations in the European Union fell last month after decreases in France, Italy and Germany offset gains posted in Spain.

As a cease-fire that halted a 15-month-long war nears its end on Saturday, Israel and the U.S. are trying to push Hamas to extend the first phase of the truce, delaying a discussion of the hardest parts of a pact that would see a complete end to the war.

Larry Ellison's half-billion-dollar quest to change farming has mostly been a bust . What Else Matters President Trump endorsed Elon Musk's demand that federal workers summarize their weekly accomplishments or face termination, an order that agency leaders interpreted in conflicting guidance over whether and how employees should respond.

Anthropic is finalizing a $3.5 billion funding round that values the startup behind the chatbot Claude at $61.5 billion, showing how eager investors are to back promising artificial-intelligence companies despite the disruptive arrival of China's DeepSeek.

Starbucks said it would lay off 1,100 corporate employees and not fill hundreds of open roles, part of new Chief Executive Brian Niccol's effort to streamline operations.

As the Republican National Committee was gearing up for its convention in Milwaukee, it was also quietly dealing with a serious security breach of its internal communications by hackers with ties to the Chinese government, according to people familiar with the matter. About Us

Follow us on X at @WSJRisk . Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun and Richard Vanderford @VanderfordRich .

You can reach us by replying to any newsletter, or email David at [david.smagalla@wsj.com].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

February 25, 2025 07:06 ET (12:06 GMT)

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