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Robinhood’s crypto business received SEC subpoena

Robinhood Markets Inc. disclosed in a filing late Monday it received a subpoena from securities regulators regarding its cryptocurrency listings, custody of cryptocurrencies and platform operations, among other topics.

The U.S. Securities and Exchange Commission’s subpoena arrived in December, shortly after FTX Trading Ltd. and other crypto companies filed for bankruptcy, Robinhood

said in its annual report.

If the SEC or a court determines that any cryptocurrencies supported by Robinhood’s platform are securities, it could prevent the company “from continuing to facilitate trading of those cryptocurrencies (including ceasing support for such cryptocurrencies on our platform),” the company said in the filing.

Read: Robinhood accidentally sold short on a meme stock and lost $57 million

Earlier this month, Robinhood’s board authorized the repurchase of more than 50 million shares that had been bought by Sam Bankman-Fried, founder of the failed cryptocurrency exchange FTX Ltd., which the Justice Department had seized.

After FTX filed for bankruptcy in November and following the bankruptcies of several other crypto-trading companies, including Three Arrows Capital Ltd., Voyager Digital Holdings,Inc. and Celsius Network LLC, Robinhood received an investigative subpoena from the SEC regarding, among other topics, Robinhood Crypto LLC’s “cryptocurrency listings, custody of cryptocurrencies and platform operations,” the company said in the filing.

Robinhood said it ended 2022 with $6.3 billion in cash and cash equivalents and $2.91 billion available under credit facilities. The company reported a net loss of $1.17 a share on revenue of $1.36 billion, compared with a net loss of $7.49 a share on revenue of $1.82 billion.

Shares of Robinhood dropped 0.6% in the extended session Monday after ending the regular trading day up 1.4%.

Robinhood shares have declined 16.3% over the past 12 months, right on par with the 16.3% decline by the tech-heavy Nasdaq Composite Index
while the S&P 500

has declined 9.2%.

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