Robinhood CFO doesn’t plan to put significant amount of money in crypto assets

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Retail platform Robinhood Markets Inc. does not plan to spend significant amounts of company money on crypto assets anytime soon, despite growing demand from its users for such investments, the director said. financier Jason Warnick.

Speaking at the Wall Street Journals’ CFO Network Virtual Summit on Wednesday, Mr Warnick said: “There are no compelling reasons, strategically, for our company to devote a significant amount of our cash flow. cryptocurrency business. His comments echo those of other CFOs, including Twitter Inc.’s CFO Ned Segal, who have expressed concern about the volatile nature of some of these assets or the limits of companies’ investment policies.

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Robinhood, which reported $ 51 million in crypto transaction revenue in its most recent quarter, held around $ 6.16 billion in cash and cash equivalents at the end of September, up from $ 1.40 billion at the end of 2020. Some companies, such as Tesla Inc. and Block Inc., have invested company money in bitcoin or other virtual assets, while so far many other CFOs have remained on the sidelines.

Mr Warnick said Robinhood is monitoring comments from regulators on how to deal with crypto assets. This is why Robinhood has not added any new coins or currencies beyond the ones it already offers, including bitcoin, dogecoin, and litecoin.

It’s not lost on us that our customers and others would love to see us add more coins, Mr Warnick said, responding to a question about when Robinhood would add the Shiba Inu coin to its platform.

We were a highly regulated company in a highly regulated industry, and we think it’s important that we get a little more clarity from regulators, Mr. Warnick said.

The CFO, who was appointed in November 2018, refuted claims that the Robinhood platform gamifies investing. The title of gamification is often associated with Robinhood. But the conversation never gets further than the confetti example, which is now gone, Mr Warnick said, referring to a feature that sprayed virtual confetti when users made certain transactions or made a deposit. I think the conversation was overkill, Mr Warnick said.

Mr Warnick said the company benefits from sending orders for stocks, options and cryptocurrency to its clients at high-speed trading companies, a practice known as payment for the order flow. Paying for order flow has really helped put individual investors first and participate like they’ve never done before, Mr. Warnick said.

Critics of the practice, including Securities and Exchange Commission Chairman Gary Gensler, argue that this is a conflict of interest for brokerage firms because brokers can either raise more money. to sell their clients’ order flow or pass that money on to clients in the form of price savings on the trades they do. As CFO, I pay close attention to concentration risk, said Warnick.

Write to Nina Trentmann at [email protected]

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Appeared in the January 13, 2022 print edition under the headline “Robinhood Platform Not Planning to Make Big Crypto Investments.”

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