Crypto trading volumes on the Robinhood platform grew by 224% in the quarter

What’s new? Online broker Robinhood reported a 224% increase in crypto trading volumes in Q1, reaching $36 billion. Crypto services accounted for nearly 40% of Robinhood’s transaction revenue totaling $329 million and helped it close its second consecutive quarter with a net profit of $157 million.

Robinhood’s report

What else is known? During the earnings report, Robinhood CEO Vladimir Tenev called it a “disappointing event” to receive Wells’ notice from the US Securities and Exchange Commission (SEC).

Wells is a formal notice from the SEC in writing. It is sent after an internal investigation into possible violations of the law is completed and informs the recipient company of the agency’s plans to take enforcement action, such as filing a lawsuit.

The broker received a notice against its Robinhood Crypto unit on May 4 for possible violations of securities and exchange laws. Robinhood later noted that it would continue to offer cryptocurrency services.

CFO Jason Warnick emphasized that the company takes a conservative approach to token listings and services and follows the same legal standards in its crypto business as it does in its brokerage business.

Tenev also emphasized that the company intends to protect the firm and the interests of its clients, and the recent events will not affect their accounts on the platform.

In a new report, Robinhood also said it stored $26,2 billion worth of users’ cryptocurrency, up 78% from the previous quarter. The significant growth can be partially attributed to rising market prices, with bitcoin up 65% during the quarter.

Robinhood launched its cryptocurrency division in February 2018, initially offering BTC and ETH trading in several states. Litecoin (LTC), Uniswap (UNI), Avalanche (AVAX), Chainlink (LINK), and several other coins were later added to the platform.

Shares of Robinhood (HOOD) are trading at $17,85 on the Nasdaq, having lost 0,78% overnight. Meanwhile, the growth since the beginning of the year has exceeded 40%, and the value has increased by 123% in the last six months.

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Last year, the SEC filed lawsuits against crypto exchanges Binance and Coinbase, categorizing several Proof of Stake (PoS) blockchain tokens as securities, including Solana (SOL), Cardano (ADA), and Polygon (MATIC). Robinhood has since discontinued support for these coins.