Robinhood, the popular online brokerage perhaps best known for its role in the memestock craze of early 2021, announced in its third-quarter earnings report on Tuesday that it plans to launch cryptocurrency trading in the European Union “in the coming weeks.”
“Looking to the future, we continue to focus on providing industry-leading products that serve more customers’ financial needs, gain market share, expand internationally, and continue to change the industry for the better,” said Vlad Tenev, CEO and Co-Founder. a permit.
However, the planned expansion of the brokerage app into cryptocurrency trading in Europe was accompanied by a decline in the platform’s total cryptocurrency trading revenues – from $31 million in the previous quarter to $23 million, a decrease of 26%. Compared to last year, Robinhood’s decline in cryptocurrency revenue was even more dramatic: a 55% drop from $51 million in 2022.
The number of crypto assets held on behalf of clients fell by approximately 11% from the previous quarter, from $11.5 billion to $10.2 billion, but there was a 9% year-on-year increase from $9.4 billion.
In addition to the crypto decline, Robinhood reported a 4% decline in revenue from the previous quarter, from $486 million to $467 million. The company’s loss of $85 million for the third quarter, a per-share loss of nine cents, was below analysts’ estimates of two cents. In the second quarter of 2023, Robinhood posted a profit of $25 million. Shares fell as much as 7.5% to $9.03 in after-market trading.
Robinhood’s plan to expand cryptocurrency trading in Europe comes on the heels of the company’s announced expansion into the United Kingdom earlier this year. This is also one of the most ambitious cryptocurrency announcements the company has made since it unveiled its crypto wallet in 2022, especially as the brokerage scaled back offerings in the US following enforcement actions by the Securities and Exchange Commission.
In June, the SEC filed a lawsuit against Coinbase and Binance, two of the world’s largest cryptocurrency exchanges, and argued that they allowed users to trade unregistered securities, including tokens of the Solana, Polygon, and Cardano blockchains. Days later, Robinhood removed the tokens from its cryptocurrency trading platform.
In August, it was reported that Robinhood and Jump Crypto, one of the largest cryptocurrency market makers that received SEC scrutiny for its association with TerraUSD creator Do Kwon, were no longer working together.
