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Facing $70M in fines from regulators, Robinhood files for IPO

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Inventory and cryptocurrency buying and selling app Robinhood has filed an software with the U.S. Securities and Alternate Fee for an preliminary public providing.

In a Kind S-1 registration assertion filed Thursday with the SEC, Robinhood mentioned it meant to maneuver ahead with an preliminary public providing for its Class A typical inventory. If accredited, the corporate mentioned it plans to commerce utilizing the ticker “HOOD” on the Nasdaq and lift $100 million in the debut. Robinhood mentioned it could reserve 20% to 35% of the shares for its customers.

The IPO announcement comes simply at some point after the U.S. Monetary Business Regulatory Authority ordered Robinhood to pay roughly $70 million in fines associated to its alleged “systemic supervisory failures” in addition to restitution to prospects it had allegedly induced “widespread and significant harm.” Robinhood reported in the submitting that it had reached an agreement-in-principle with the regulatory physique to pay the $57 million nice, however solely $4.5 million in restitution to affected customers.

As well as, Robinhood has confronted a number of lawsuits from regulators, state authorities, and people associated to the platform’s outages, account takeovers, and buying and selling restrictions linked to the GameStop inventory controversy. The corporate mentioned it anticipates it’s going to pay $15 million to the New York State Division of Monetary Companies associated to “anti-money laundering and cybersecurity-related issues.”

The meme-based cryptocurrency Dogecoin (DOGE) performed a big position in the buying and selling app’s exercise. Robinhood reported 34% of its whole income from crypto in the primary quarter of 2021 got here from DOGE. The corporate claimed that its enterprise may very well be adversely affected “if the markets for Dogecoin deteriorate or if the price of Dogecoin declines” with out comparable demand for different tokens on the app.

Robinhood reported in the SEC submitting that it held $11.6 billion in crypto belongings beneath custody as of March 31, with 17% of its whole income in the primary quarter of 2021 coming from cryptocurrency transactions. Greater than 9.5 million customers traded roughly $88 billion in crypto over the identical time interval.

Associated: Coinbase expects direct itemizing on April 14

The buying and selling app had mentioned it was planning to go public final month however postponed the providing to July. The IPO, filed with the SEC, comes amid employees on the regulatory physique conducting an examination into Robinhood’s outages, considerations over its choices buying and selling, and different points associated to its enterprise.

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