Robinhood/cryptos: pocket rocket may curve round regulators

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Robin Hood wants to show investors that there are still a lot of growth arrows left in the quiver. Selling stock order flows to brokers makes up the bulk of your bottom line, a controversial practice. Therefore, US FinTech wants a deeper exposure to cryptocurrencies.

We plan to add a popular trading app Cryptographic wallet On that platform. Robinhood customers can now buy and sell digital currencies such as Dogecoin and Bitcoin. However, they cannot remove their holdings from the platform or receive them elsewhere.

Cryptographic wallets allow users to send and receive digital tokens to and from other wallet addresses without first converting them to dollars.

This move could help groups seduce customers from established cryptocurrency exchanges like Coinbase. But that’s what the official hostility towards digital currencies is growing. Coinbase this week New crypto loan product After the regulator threatened to take legal action. The business has lost more than a quarter of its market value since it went public in April.

Still, I understand Robin Hood’s interest in cryptography. The cost of routing a customer’s crypto trading to a high-speed trading company is now nearly five times the price of routing a stock transaction.They totaled $ 233 million, Or 41% of second quarter net revenue. This is an increase from $ 5.3 million in the year-ago quarter. Approximately 60% of funded accounts traded cryptocurrencies during the period.Cryptocurrency assets in storage $ 23 billion At the end of June, from just $ 1 billion a year ago.

Robin Hood engages in a type of regulatory arbitrage. Watchdog in the US is scrutinizing payments for equity order flows. However, the regulatory status of cryptography is unknown. Watchdog cannot intervene in the sale of digital token order flows until cryptocurrency capabilities have been expanded. This reduces the value of the add-on wallet.

Therefore, Robin Hood’s latest business initiative highlights a bigger issue. Cryptography is step by step into the mainstream of finance. US regulation is unfortunately stumbling on them.

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