Trading platform Robinhood Markets Inc HOOD disclosed a first-quarter notional cryptocurrency trading volume of $36 billion, a more than three-fold increase year-over-year.
What Happened: The surge in volumes helped boost cryptocurrency-related revenue to $126 million, up 232% year-over-year. According to the company, the cryptocurrency arm played a vital role in driving total transaction-based revenue to $329 million, up 59% over the same period last year.
The firm reported $26 billion worth of cryptocurrencies under custody as of March 31, marking a 78% jump quarter-over-quarter.
The company’s cryptocurrency arm, Robinhood Crypto, allows users to trade in popular coins such as Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), Dogecoin (CRYPTO: DOGE), and others.
Why It Matters: The impressive numbers from Robinhood's cryptocurrency vertical come despite growing regulatory hostilities in the U.S. The firm was subpoenaed by the SEC over its cryptocurrency listings, platform operations, and security in February.
More recently, the company disclosed getting slapped with a Wells Notice from the regulator, a prelude to a likely enforcement action.
Responding to questions on the Well Notice during the earnings call, CEO Vlad Tenev termed it as a disappointing development, saying "We firmly believe U.S. consumers should have access to this asset class. They deserve to be on equal footing with people all over the world."
The top executive stated that the firm would defend itself from any potential legal action.
Chief Financial Officer Jason Warnick reassured clients that their accounts were not affected due to the Wells Notice, calling it "business as usual" for Robinhood Crypto.
Price Action: Robinhood stock was up 4.20% to $18.60 in after-hours trading as of 7:59 p.m. EDT.
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