Robinhood to launch cryptocurrency trading in EU despite crypto revenue falling nearly 26% from last quarter

Robinhood, the popular online stock brokerage known for its role in the memestock craze in early 2021, announced on Tuesday in its third-quarter earnings report that it plans to launch cryptocurrencies in the European Union in the coming weeks. trade.

CEO and co-founder Vlad Tenev said: “Looking ahead, we will continue to focus on delivering industry-leading products, meeting the financial needs of more customers, gaining market share, expanding internationally, and continuing to make the industry Better.”

However, the brokerage app’s plans to expand cryptocurrency trading, which is currently only available in the United States, to Europe comes amid a decline in the platform’s overall cryptocurrency trading revenue – down from $31 million in the previous quarter. to $23 million, down 26%. Robinhood's crypto revenue is down even more sharply compared to this time last year: down 55% from $51 million in 2022.

The number of crypto assets held on behalf of clients decreased by approximately 11% from the previous quarter, from $11.5 billion to $10.2 billion, but increased by 9% year-over-year from $9.4 billion.

In addition to the decline in cryptocurrencies, Robinhood reported a 4% decline in revenue from the previous quarter, falling from $486 million to $467 million. The company lost $85 million in the third quarter, or 9 cents per share, missing analysts' expectations of 2 cents. In the second quarter of 2023, Robinhood posted a profit of $25 million. Shares plunged 7.5% to $9.03 in after-hours trading.

Robinhood plans to expand cryptocurrency trading to Europe, following its expansion to the UK announced earlier this year. It's also one of the company's more ambitious cryptocurrency announcements since launching its crypto wallet in 2022, especially after the brokerage scaled back its U.S. offering following enforcement action by the U.S. Securities and Exchange Commission.

In June, the SEC sued Coinbase and Binance, two of the world’s largest cryptocurrency exchanges, arguing that they allowed users to trade unregistered securities, including Solana, Polygon and Cardano tokens. A few days later, Robinhood delisted the coins from its cryptocurrency trading platform.

In August, it was reported that Robinhood and Jump Crypto — one of the largest cryptocurrency market makers that was under SEC scrutiny for its ties to TerraUSD creator Do Kwon — were no longer doing business together.

In a conference call with investors following the release of third-quarter earnings, when asked about the downturn in the cryptocurrency market, CEO Tenev said: "We are focused on leveraging this opportunity to enhance our ability to build our platform."

However, the expansion of cryptocurrency trading into Europe (regulatory clarity in Europe will allow Robinhood to offer a different mix of assets than in the United States) will open the brokerage’s cryptocurrency business to hundreds of people.

As for the United States, Tenev said Robinhood is still waiting for guidance from the government.

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