Major cryptocurrency and stock trading app Robinhood is reportedly struggling to move forward with its initial public offering due to an ongoing review from securities regulators.
According to a Thursday report by Bloomberg, the United States Securities and Exchange Commission has been questioning Robinhood about its cryptocurrency business, resulting in delays for the firm’s public offering plans. The company has been expanding its cryptocurrency offers since March, increasing its workforce and adding more crypto trading pairs.
Citing anonymous people familiar with the matter, the report stated that Robinhood’s IPO plan could be delayed until autumn. As previously reported, Robinhood initially planned to launch its IPO in June but postponed the offering to July several weeks ago, with sources claiming that the firm wanted to time its IPO to when people return from the July 4 holiday.
One of the most popular apps to trade stocks and crypto in the United States, Robinhood confidentially submitted a draft IPO registration with the U.S. SEC in March. The company did not originally specify an expected date for its IPO, only stating that it would pursue a public offering “after the SEC contemplates its review process, subject to market and other conditions.”
Robinhood declined to comment on the matter.
After launching cryptocurrency trading in early 2018, Robinhood has seen its crypto business thrive, posting a sixfold quarterly increase in users during the first quarter of 2021. Robinhood’s massive growth this year came despite the controversy around the company suspending trading of GameStop stock this January, facing outrage from the trading community and increased attention from U.S. regulators.
Alongside issues related to GameStop, Robinhood also became a target of public criticism after it allegedly offered trading services to inexperienced investors. In April, Massachusetts’ securities regulators sought to revoke Robinhood’s broker-dealer license in the state, accusing the firm of providing services to Massachusetts customers with little or no investment experience.