Good morning market watchers.

The Securities and Exchange Commission continues with its anti-crypto crusade.

This time, it has Robinhood in its crosshairs.

Buckle up.

The long reach of the crypto police

The things you do often become what you get good at. 

It’s safe to say the SEC is excellent at suing crypto companies. 

It warned Robinhood on Monday it could face enforcement action for its digital asset business. 

Should the SEC move forward and sue Robinhood, it would mark the agency’s seventh crypto lawsuit in three months. 

There’s a chance Robinhood convinces regulators not to act on the warning — which came in the form of a Wells notice — but the SEC’s top man probably won’t let that happen. 

SEC Chair Gary Gensler has overseen a huge number of Wells notices in his tenure.

So much so that it seems as if he’s carrying out a personal vendetta. 

Since he took the top job in 2021, he’s met controversy and muddied definitions claiming crypto regulation falls under his purview. 

To Gensler, crypto is as much a headache to regulators as it is a risk to investors.

He’s staunch in his belief that the same rules governing stocks and bonds should also regulate crypto. 

On his watch, the SEC has sent Wells notices to: 

• Coinbase

• Uniswap

• Kraken

• Metamask

“The SEC allocates a grossly disproportionate amount of its resources to crypto, given that it’s actual purpose is to regulate equity and debt markets,” Variant Fund’s chief legal officer Jack Chervinsky wrote Monday on X. 

Whether you agree or not, the move against Robinhood does seem like a head-scratcher. 

The company has walked a regulatory tightrope and gone through extensive steps to avoid breaking compliance. 

Three years ago, Robinhood began a lengthy process to register as a special purpose broker-dealer, which the SEC had signaled was necessary at the time. 

Then, after more than a year, authorities dismissed Robinhood and said nothing would come of its efforts to secure the proper license. 

Now, the SEC may end up suing a company for not having the proper license, even though the SEC likely had a role in denying the license in the first place.

Dan Gallagher, Robinhood’s legal chief, said the company has spent years in constant communication with the SEC to make sure its offerings were above board:

“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”

*At a glance:

Elsewhere:

• Fed Richmond President Thomas Barkin said the full impact of interest rates hasn’t happened yet. He said he expects the economy to slow and inflation to cool further. (Bloomberg)

• Apple is working on its own AI chips. The company is betting on itself in the new technology arms race with something reportedly code-named Project ACDC. (WSJ)

• Social Security funds will run out in a decade. The Treasury said new projections show the savings will deplete in 2035, rather than the prior estimate of 2034. All eyes are on Congress to do something. (CNBC)

Rapid-fire:

• Air regulators opened a new investigation into Boeing plans (WSJ)

• Lucid beat sales expectations and its stock tumbled (Barron’s)

• Israel and Hamas still haven’t landed on a cease-fire plan (Bloomberg)

• Apple and Rivian are in talks for a partnership (Investor’s Business Daily)

• Russia’s finances keep getting squeezed by the US (FT)

Last thing:

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