- Robinhood plans to introduce cryptocurrency trading services in the European Union.
- The platform experienced a 26% drop in crypto trading revenue in the third quarter.
- Regulatory changes have prompted some crypto firms to cease serving U.K. customers, affecting the industry.
In its third-quarter earnings report released on Tuesday, Robinhood, the popular trading platform, announced its intention to launch cryptocurrency trading services in the European Union “in the coming weeks.”
“Looking ahead, we remain focused on providing industry-leading products that serve far more of customers’ financial needs, gaining market share, expanding internationally, and continuing to change the industry for the better.”
Vlad Tenev, CEO and cofounder
However, Robinhood’s plan to expand its cryptocurrency trading services, which are currently exclusive to the United States, coincided with a decrease in the platform’s overall revenue from crypto trading. The revenue dipped from $31 million in the previous quarter to $23 million, marking a 26% decline. When compared to the same period the previous year, the drop in Robinhood’s crypto revenue was even more pronounced, with a 55% decrease from $51 million in 2022.
The total value of crypto assets held on behalf of customers saw an approximately 11% decline from the previous quarter, dropping from $11.5 billion to $10.2 billion. However, there was a 9% year-over-year increase from $9.4 billion.
In addition to the decline in cryptocurrency-related figures, Robinhood also reported a 4% reduction in revenue compared to the previous quarter, falling from $486 million to $467 million. The company’s third-quarter loss amounted to $85 million, translating to a per-share loss of nine cents, which was below the analysts’ estimated two cents. In the second quarter of 2023, Robinhood had reported a profit of $25 million. Following this announcement, the company’s shares dropped by as much as 7.5% in after-market trading, reaching $9.03.
The decision to expand its services into the European Union comes at a time when some cryptocurrency firms have stopped serving customers in the United Kingdom. This change is in response to new regulatory requirements, which were implemented on October 8 and mandates that cryptocurrency companies provide clear risk labels and make system adjustments.
Robinhood also reported a 55% decrease in its cryptocurrency-related revenue for the third quarter, with earnings falling to $23 million compared to the same quarter the previous year.
In June, Robinhood discontinued support for all tokens implicated in the U.S. Securities and Exchange Commission’s legal actions against cryptocurrency exchanges Binance and Coinbase. These tokens included Cardano (ADA), Polygon (MATIC), and Solana (SOL). Currently, the trading platform offers trading options for 15 different cryptocurrencies, including well-known assets such as bitcoin (BTC), ether (ETH), dogecoin (DOGE), and avalanche (AVAX).
