Robinhood could delay its initial public offering (IPO) as the US Securities and Exchange Commission (SEC) is reviewing the company's cryptocurrency business more deeply, Bloomberg has learned, citing people familiar with the matter. Robinhood's crypto-related arm, which began offering services in 2018, has reportedly drawn questions from the regulator.
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The Menlo Park-based broker can still go public this summer, however, Robinhood might also delay its IPO until this fall, the people said. Robinhood has not officially commented on possible delay of its IPO yet.
In May this year, Massachusetts state regulators received a greenlight from Suffolk County Superior Court to move forward with enforcement action against Robinhood as the fintech broker failed to block their allegations in court. According to Suffolk County Superior Court Judge, Kenneth Salinger, Robinhood can continue challenging in court the legality of the state's new fiduciary rule.
As iHodl reported earlier, Massachusetts watchdogs filed a lawsuit against Robinhood accusing the millennial-focused investment app of "aggressive tactics to attract inexperienced investors." Massachusetts securities regulators say Robinhood is using gamification strategies "to manipulate customers" and often experiences technical issues. The company is disagreed with the allegations by the Massachusetts Securities Division and plans "to defend the company vigorously," said a Robinhood spokesperson.
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