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 the company’s money on cryptoassets anytime soon, despite its users’ growing demand for such investments, the director said. financier Jason Warnick.

Speaking at the Wall Street Journal’s CFO Network Virtual Summit on Wednesday, Mr Warnick said: “There are no compelling strategic reasons for our company to invest a significant amount of our corporate cash in cryptocurrencies. ” 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.

The Robinhood app logo on a smartphone in New York City, December 17, 2020 (Associated Press / AP Newsroom)

“It is 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. .

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“We are a highly regulated company in a highly regulated industry, and we believe it is 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 beyond 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 overdone,” Mr. Warnick said.

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

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 Mr. Warnick.

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