Robinhood has answered SEC's crypto warning

Robinhood has answered SEC's crypto warning
The retail fintech's CEO says it has filed a "high-quality" response to the regulator's query as it beat earnings expectations.
AUG 08, 2024
By  Bloomberg

Robinhood Markets Inc. is continuing to engage with the US Securities and Exchange Commission after receiving a warning from the financial regulator in May, according to Chief Executive Officer Vlad Tenev, foreshadowing an enforcement action.

The retail trading platform has submitted a response to what is known as an SEC Wells notice related to the firm’s cryptocurrency business, Tenev said Thursday in an interview on Bloomberg Television. 

“We’ve spent a lot of time making sure that the response is as high-quality as possible,” he said, adding that he had no further updates to share.

Since the pandemic-era retail trading mania that engulfed Robinhood, the firm has diversified its business, expanding into retirement products and credit cards as well as crypto ventures outside of the US. It is still best known as a popular and accessible trading platform.

Robinhood competitors including Charles Schwab Corp. and Fidelity Investments dealt with outages amid a global stock-market selloff on Monday. Tenev said the firm’s technology is strong, and they didn’t have issues “of a significant nature when the competitors were down.”

“Now, when we see high volumes, we’re ready for it,” he said. “Customers tend to be buying the dip–there are more buyers than sellers, which we think is a really good sign for the health of the retail market.”

The firm, known for its varied options that include 24-hour trading, did face some disruption after its execution venue Blue Ocean ATS suspended overnight trading, according to a Robinhood statement on Monday. Tenev said Blue Ocean wasn’t able to handle the scale and the infrastructure “basically fell over.”

“We look to make sure they enable it for all of their customers and all of our customers as soon as possible,” he said. 

Menlo Park, Calif.-based Robinhood reported second-quarter earnings on Wednesday that beat analysts’ expectations, with net revenue of $682 million for the period. 

Robinhood rose 2.2% to $17.50 at 11:32 a.m. in New York on Thursday, giving the company a market value of about $15.5 billion. 

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.