Late Monday, Robinhood Markets Inc. disclosed that it received a subpoena from securities regulators regarding its cryptocurrency listings, custody of cryptocurrencies, and platform operations. The U.S. Securities and Exchange Commission (SEC) sent the subpoena in December, shortly after FTX Trading Ltd. and other crypto companies filed for bankruptcy. Robinhood said in its annual report that the subpoena focused on topics such as its cryptocurrency listings, custody of cryptocurrencies, and platform operations.
If the SEC or a court decides that any cryptocurrencies supported by Robinhood’s platform are securities, it could prevent the company from continuing to facilitate trading of those cryptocurrencies. The company could be forced to cease support for such cryptocurrencies on its platform.
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.
Robinhood received an investigative subpoena from the SEC regarding, among other topics, Robinhood Crypto LLC’s cryptocurrency listings, custody of cryptocurrencies, and platform operations, after FTX filed for bankruptcy in November.
In its annual report, Robinhood reported that 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.
The news caused Robinhood shares to drop 0.6% in the extended session on Monday after ending the regular trading day up 1.4%. Over the past 12 months, Robinhood shares have declined 16.3%, right in line with the 16.3% decline of the tech-heavy Nasdaq Composite Index, while the S&P 500 has declined 9.2%.
