Investment platform Robinhood said that regulatory intervention in crypto trading and payment in a payment arrangement between brokerages and trading firms could hamper its business.
In an amended filing on Friday, the commission-free trading platform Robinhood has urged on speeding up the approval for a previously announced shareholder stock sale.
The platform noted that the regulatory landscape involving cryptocurrencies is constantly evolving and is subjected to change as crypto trades made up a 41% share of its revenue in the second quarter, a period when investment in digital currencies boomed.
The platform’s key stream of revenue, payment for order flow on stock and options trades, could come under regulatory scrutiny as highlighted by the recent comments made by U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler.
The chairman said that the agency is undertaking, including reviewing a system called payment for order flow that accounts for a significant slice of Robinhood’s revenue.
Earlier two weeks ago, Robinhood announced testing its crypto wallet with selected clients where investors will be able to trade, send and receive digital currencies, as well as move them in and out of the Robinhood app.
The new wallets will let clients consolidate their digital coins into one account where clients can then trade, send and receive cryptocurrencies to and from other wallet addresses. Rivals Coinbase and Gemini are already offering this feature.
The brokerage platform will initially roll out this feature in a beta version of the trading app. The crypto wallets will have several safety features including identity verification, multifactor authentication, and email and phone verification to keep coins safe from hackers.
Robinhood debuted its cryptocurrency trading service three years ago. Since then, it has become increasingly important to the company’s top features as more than half of Robinhood’s transaction-based revenue last quarter came from cryptocurrency trading, which is up from just 3% a year earlier.