Online brokerage Robinhood Markets (HOOD.O) surpassed estimates for first-quarter profit on Wednesday, largely due to strong crypto trading volumes and rate hikes that bolstered its net interest revenue. The approval of the first spot bitcoin ETFs in the U.S. in January boosted optimism toward the crypto industry, which had been reeling from several high-profile collapses over the past two years.
However, the company revealed earlier this week that its U.S. crypto trading arm received a Wells notice from the SEC concerning tokens traded on its platform. This notice is given when the regulator intends to bring enforcement action against a company. Despite the potential challenges, Robinhood expressed disappointment but stated its intention to contest the SEC’s claims and, if necessary, take legal action. CFO Jason Warnick emphasized that Robinhood has been careful in its crypto business and selective in offering coins.