Robinhood (NASDAQ:HOOD) not too long ago obtained a Wells Discover from the Securities and Trade Fee, which was surprising given the corporate’s conservative method to cryptocurrency listings, in keeping with a KBW analysis report launched on Monday.
KBW highlighted that Robinhood gives a comparatively modest choice of fifteen cryptocurrencies on its U.S. platform, in distinction to some opponents who record over 200 digital property. Analysts led by Kyle Voigt consider that Robinhood’s crypto operations within the U.S. will stay unchanged, they usually anticipate the SEC will possible file a lawsuit within the coming months.
“Our preliminary evaluation means that Robinhood would decide to contest the SEC in court docket and stands a greater probability of prevailing than a lot of its U.S. friends, ought to they face related challenges. That is due partly to Robinhood’s stringent itemizing standards,” the KBW report said.
Cryptocurrency buying and selling accounts for 12% of Robinhood’s whole income. KBW speculates that the SEC’s focus could be on a selected group of digital property supplied on the platform. From a income threat standpoint, essentially the most essential state of affairs could be if the SEC decides to categorise Ethereum as a safety, because it represents roughly 25% of Robinhood’s crypto buying and selling quantity.
The brokerage maintains a market carry out ranking on Robinhood’s inventory with a goal value of $20. Following the information, Robinhood’s shares noticed a slight enhance, buying and selling up by 1.3% early Tuesday, at round $18.
In accordance with KBW, Robinhood shareholders might not obtain a definitive decision on the potential authorized case till late 2025 on the earliest, drawing parallels to the continuing regulatory proceedings towards Coinbase (NASDAQ:COIN).
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