Robinhood Markets (HOOD) said Monday that the Securities and Exchange Commission dropped an investigation into its crypto business in the latest sign of potentially easing regulation for the digital currency industry.

The trading platform said its crypto business received a notice on Friday from the SEC that it would no longer proceed with an enforcement action. A spokesperson for the regulator declined to comment.

"We applaud the staff's decision to close this investigation with no action," Dan Gallagher, Robinhood's chief legal, compliance and corporate affairs officer said in a statement. "Let me be crystal clear -- this investigation never should have been opened."

The news comes after crypto trading platform Coinbase (COIN) said Friday that the SEC agreed to dismiss its enforcement case against the company.

Shares of Robinhood and Coinbase declined 4% each in Monday trade.

Oppenheimer said that the dismissal of the SEC's lawsuit against Coinbase "probably marks the beginning of the end of 'regulation by enforcement' era targeted to crypto."

"This new regime will not only benefit Coinbase, but also the whole crypto industry," Oppenheimer said in a Monday note.

Robinhood received a notice from the SEC in May 2024 that it was likely to recommend the agency file an enforcement action alleging the company violated the Securities Exchange Act of 1934.

"Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities," Gallagher said Monday. "As we explained to the SEC, any case against Robinhood Crypto would have failed."

Earlier this month, Robinhood reported that cryptocurrency revenue soared more than 700% year-over-year to $358 million in the fourth quarter. Crypto notional volumes jumped more than 400%.