The CEO of Robinhood Markets Inc (NASDAQ:HOOD) Vlad Tenev expressed his frustration with the U.S. Securities and Exchange Commission led by Chair Gary Gensler after the regulatory body issued a wells notice to the company's crypto arm.
What Happened: Tenev, in a recent interview with CNBC's Last Call, revealed that despite Robinhood's efforts to engage with the SEC, the regulatory body's response has been disappointing.
"We actually came in good faith to meet with the SEC. I think we met with them 16 times and, unfortunately, that was not reciprocated," Tenev said.
Tenev said, "The SEC has the ability to change rules to allow brokers to accommodate crypto assets, and they don't seem intent on doing that ... that's disappointing." He added, "We do believe that crypto assets are becoming more and more important, and it would not be acceptable to us to not have Americans have access to them."
"We actually came in good faith to meet with the SEC. I think we met with them 16 times and, unfortunately, that was not reciprocated," @vladtenev tells @Kr00ney after Robinhood's crypto arm received a wells notice from the SEC. $HOOD pic.twitter.com/cOGU3BFGpD
— Last Call (@LastCallCNBC) May 8, 2024
Robinhood's crypto arm received a wells notice from the SEC, indicating potential enforcement actions related to its cryptocurrency operations. This notice followed a period of investigation into Robinhood's cryptocurrency listings and custody, as well as its platform operations.
Why It Matters: Despite the regulatory challenges, Robinhood's crypto business has been thriving. The company recently reported a three-fold increase in first-quarter notional cryptocurrency trading volume, reaching $36 billion. This surge in volumes boosted cryptocurrency-related revenue to $126 million, up 232% year-over-year.
Robinhood's overall revenue also saw a 40% year-over-year increase in the first quarter, reaching $618 million. The company's decision to expand its product suite for active traders, with plans to launch index options and futures trading, is seen as a direct appeal to its growing user base and trading volumes.
Image Via Shutterstock
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.