Robinhood Faces SEC Subpoena Over Crypto Business
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Robinhood Markets (NASDAQ: HOOD) disclosed in its regulatory filing it had received a subpoena from the US Securities and Exchange Commission (SEC) over its crypto-related business.

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In its latest 10-K filing, the brokerage firm said it had received an "investigative subpoena from the SEC" regarding "cryptocurrency listings, custody of cryptocurrencies, and platform operations." The Menlo Park-headquartered firm also admitted its crypto business might face regulatory scrutiny should regulators bring new changes regarding the crypto market or if there's a "systemic market event."

"Our business has been and might continue to be harmed by changes in business, economic, or political conditions that impact global financial markets, or by a systemic market event," Robinhood said.

Robinhood's Crypto-related Revenue Falls By 24%

In addition to SEC subpoena, Robinhood added it had also received similar requests from the California Attorney General's office.

Besides regulatory oversight, Robinhood acknowledged there are other scenarios that can "arise suddenly," impacting the firm's business. The brokerage firm also noted many of its clients are "first time investors," which means they might be influenced by FOMO, which, in turn, would impact trading volume and result in reduced revenues.

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