Robinhood’s plan to go public this summer is facing delays as federal regulators scrutinize its growing cryptocurrency enterprise, Bloomberg reports.
Several people familiar with the matter told the outlet on Thursday that Robinhood has been locked in a back-and-forth with the Securities and Exchange Commission in recent weeks. SEC officials have been asking the stock trading app maker about its recent push into cryptocurrency, one of the sources said under the condition of anonymity according to Bloomberg.
Robinhood had originally targeted June for its IPO after initially filing in March. However, that deadline later shifted to July, Bloomberg reported earlier this month, and these new regulatory hurdles could push it back even further, possibly into the fall. Robinhood plans to reveal its financials as soon as possible and to go public as soon the SEC finishes its review, the outlet’s sources said. A spokesperson for Robinhood declined to comment.
In 2018, Robinhood rolled out its Crypto unit for users to trade digital currencies such as bitcoin and ethereum. As cryptocurrencies become increasingly more mainstream, Robinhood has established itself as an entry point for new investors looking to dip their toes in the notoriously volatile market. It offers a wider selection than competitors such as PayPal, including the joke currency Dogecoin, a token that started as a meme and has been heavily pushed by billionaire Elon Musk.
Some 1.7 million people traded cryptocurrencies on Robinhood’s app in the last quarter of 2020, a figure that soared to 9.5 million in the first quarter of 2021, the company reports. The GameStonks drama earlier this year prompted a wave of federal scrutiny that apparently Robinhood is still struggling to shake, with regulators arguing that the site encourages the game-like nature of trading to the detriment of inexperienced retail investors.