Robinhood Q1 crypto trading up 224% – SEC action ‘disappointing’
Robinhood CEO Vladimir Tenev described the recent announcement by the Securities and Exchange Commission of Wales as a “sad development” during the Q1 earnings call that the company saw a 224% rise in crypto trading volume to $36 billion in the quarter.
Robinhood's crypto-related services contributed nearly 40% of its transaction-based revenue of $329 million.
But the strong quarterly earnings came on the back of Wells' announcement last week that the US securities regulator had targeted Robinhood's crypto listings and brokerage operations.
Tenev said the news was a “sad development.”
The firm's chief financial officer, Jason Warnick, stressed that the company adopts a conservative approach to coin listings and services, and maintains its crypto business as a brokerage business with legal and compliance standards.
“So it's sad to see more law enforcement here.”
Robinhood executives, however, stressed that customer accounts will not be affected by the development.
“We will defend the company and continue to advocate for our customers,” Tenev added.
Aside from the headwinds, Robinhood's first-quarter performance beat industry expectations, reporting revenue of $618 million, beating investment research firm Zacks' estimate of $534.5 million by 15.6 percent.
Shares of Robinhood rose 7.3% to $19.15 in afternoon trading, but have since fallen to $18.55, Google Finance reported.
Robinhood's stock price is up 44.3% year-to-date.
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Robinhood reported that $26.2 billion worth of crypto was held by users, a 78% increase from the previous quarter.
The sharp increase can be attributed in part to a rise in market value, with Bitcoin (BTC) up 65.1% to $69,700 in the quarter.
Robinhood launched its cryptocurrency unit in February 2018, offering Bitcoin and Ethereum (ETH) trading in multiple states. Since then, it has expanded its offering to Litecoin (LTC), Uniswap (UNI), Avalanche (AVAX), Chainlink (LINK) and many other tokens.
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