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Robinhood CEO Vladimir Tenev described the recent Securities and Exchange Commission Wells notice as a “disappointing development” during a Q1 earnings call, as the firm posted a 224% increase in crypto trading volumes in the quarter to $36 billion.
Robinhood’s crypto-related services <a href="https://investors.robinhood.com/news/news-details/2024/Robinhood-Reports-First-Quarter-2024-Results/default.aspx" target="_blank" rel="noopener noreferrer nofollow">contributed</a> to nearly 40% of its transaction-based revenue of $329 million, helping the firm record its second straight profitable quarter with a net income of $157 million.
But the strong quarter earnings results come in light of a <a href="https://cointelegraph.com/news/robinhood-crypto-business-sec-wells-notice" rel="noopener noreferrer nofollow">Wells notice handed to the firm</a> by the United States securities regulator last week, which targets Robinhood’s crypto listings and custodian operations.
Tenev <a href="https://edge.media-server.com/mmc/p/b4jy2hcv/" target="_blank" rel="noopener noreferrer nofollow">said</a> the news was a “disappointing development.”
Its chief financial officer, Jason Warnick, stressed the firm has adopted a conservative approach toward its coin listings and services and holds its crypto business to the same legal and compliance standards as its brokerage business.
<blockquote>
 “So it’s disappointing to see more regulation by enforcement here.”
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The Robinhood executives however stressed that customer accounts aren't impacted by the development.
"We're going to defend the firm and continue to advocate for our customers," Tenev added.
Aside from the dilemma, Robinhood’s first quarter performance surpassed industry expectations, with its reported revenue of $618 million beating a $534.5 million estimate by investment research firm Zacks by 15.6%.
Robinhood shares rallied as high as 7.3% to $19.15 in after-hours trading but has since cooled off to $18.55, <a href="https://www.google.com/finance/quote/HOOD:NASDAQ?sa=X&amp;ved=2ahUKEwjMyfX9gf-FAxVXRmcHHdh2BCQQ3ecFegQIPhAf" target="_blank" rel="noopener noreferrer nofollow">according</a> to Google Finance.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/c4524de3-85ac-434d-a950-1a897e1b5de5.png">
 <figcaption style="text-align: center;">HOOD’s change in share price on May 8. Source: Google Finance
 </figcaption>
</figure>
Robinhood’s share price is now up 44.3% year-to-date.
Related: <a href="https://cointelegraph.com/news/nyse-gauges-interest-24-7-stock-trading-like-crypto" rel="noopener noreferrer nofollow">NYSE gauges interest in 24/7 stock trading like crypto: Report</a>
Robinhood reported custodying <a href="https://cointelegraph.com/news/robinhood-launches-crypto-wallet-for-android-users" rel="noopener noreferrer nofollow">$26.2 billion worth of crypto for users,</a> marking a 78% rise from last quarter.
The substantial increase could be partially attributed to a rise in market prices, with Bitcoin <a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">(BTC)</a> rallying 65.1% to $69,700 over the quarter.
Robinhood launched its cryptocurrency unit in February, 2018, offering Bitcoin and Ethereum <a href="https://cointelegraph.com/ethereum-price" rel="noopener noreferrer nofollow">(ETH)</a> trading in several states. It has since expanded its offering for Litecoin <a href="https://cointelegraph.com/ltc-price-index" rel="noopener noreferrer nofollow">(LTC),</a> Uniswap <a href="https://cointelegraph.com/uniswap-price-index" rel="noopener noreferrer nofollow">(UNI),</a> Avalanche <a href="https://cointelegraph.com/avalanche-price-index" rel="noopener noreferrer nofollow">(AVAX),</a> Chainlink <a href="https://cointelegraph.com/chainlink-price-index" rel="noopener noreferrer nofollow">(LINK)</a> and several other tokens.
Magazine: <a href="https://cointelegraph.com/magazine/crypto-market-makers-legit-dodgy-fake-it/" rel="noopener noreferrer nofollow">What do crypto market makers actually do? Liquidity, or manipulation</a>

Robinhood Q1 crypto trading surges 224% — SEC action ‘disappointing’

Cointelegraph

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