Retail trading platform Robinhood Markets said on Monday its cryptocurrency trading arm received a Wells notice from the U.S. Securities and Exchange Commission (SEC) on May 4.

Robinhood's shares fell 2.5% before the bell.

A Wells notice does not necessarily mean that recipients have violated any law. The SEC issues Wells notices to firms when it is planning to bring enforcement action against them.

"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," Dan Gallagher, chief legal, compliance and corporate affairs officer at Robinhood, said.

The SEC did not immediately respond to a request for comment.

  - Reuters