Despite increased demand from its users for such investments, retail-trading platform Robinhood Markets Inc. does not aim to spend significant sums of corporate cash on crypto-assets anytime soon, according to Chief Financial Officer Jason Warnick.
There aren’t compelling strategic reasons for our business to put any considerable amount of their corporate funds into cryptocurrencies, Mr. Warnick said at The Wall Street Journal’s virtual CFO Network Summit on Wednesday. Other finance chiefs, such as Twitter Inc. CFO Ned Segal, have expressed concern about the volatile nature of certain of these assets or the constraints imposed by firms’ investment policies.
“Robinhood is keeping an eye out for comments from regulators on how to treat crypto assets. That is why Robinhood hasn’t added any new coins or currencies on top of the ones it already offers.”
Robinhood had roughly $6.16 billion in cash and cash equivalents at the end of September, up from $1.40 billion at the end of 2020, after reporting $51 million in revenue from crypto trades. While some firms, such as Tesla Inc. and Block Inc., have invested corporate funds in bitcoin or other virtual assets, many other CFOs have remained on the sidelines thus far.
Mr. Warnick stated that Robinhood is monitoring authorities’ remarks on how to treat crypto assets. That’s why, in addition to the coins and currencies it already supports, such as bitcoin, dogecoin, and litecoin, Robinhood hasn’t added any new ones.
When asked when Shiba Inu (SHIB) will be added to the online broker’s platform, the CFO said: “It’s not lost on us that our customers and others would like to see us add more coins. We’re a highly regulated company in a highly regulated industry, and we think it’s important that we get a bit more clarity from regulators.”
The Robinhood platform is not gamified, according to the CFO, who was appointed in November 2018. The term “gamification” is frequently used to refer to Robinhood. However, the discussion never progresses beyond the confetti example, which, according to Mr. Warnick, is no longer available. Mr. Warnick was referring to a function that sprayed virtual confetti when customers completed specific trades or made deposits.
Payment for order flow, according to Mr. Warnick, benefits the company by transferring its customers’ stock, option, and cryptocurrency orders to high-speed trading firms. Mr. Warnick stated, “Payment for order flow has really helped bring individual investors to the forefront and participate like they haven’t previously.”
Brokers may either collect more money for selling their clients’ order flow or pass that money on to consumers in the form of price savings on the transactions they execute, according to critics, including Securities and Exchange Commission Chairman Gary Gensler.