Sources revealed that the review by US regulators has been obstructing Robinhood’s IPO plans. The IPO could go through a reschedule to December.
The popular financial services mobile app Robinhood’s plans to activate its services on the US stock exchange are experiencing slight delays due to regulations in the country.
According to reports, the US Securities and Exchange Commission (SEC) is slowing down Robinhood’s plans to go public this year due to concerns about its cryptocurrency business. Bloomberg reported the news on Friday, citing anonymous sources familiar with the topic.
One of the knowledgeable sources revealed to the medium that the company’s growing digital assets business “has attracted questions” from the regulatory agency. The source cited in the report also highlighted that Robinhood has been talking with the Commission in recent weeks.
Based in California, Robinhood brings trading in traditional market stocks, exchange-traded funds, and also cryptocurrencies. The app initially launched trading with digital currencies in 2018 and has experienced growth in its business since then.
Robinhood Delays its IPO Until this Fall
By 2021, the company has been inflating its cryptocurrency division, adding staff, and adding new trading pairs. An increase of 6 million users in the first quarter of the year also appears to be one of the most significant changes. Robinhood currently allows the trading of seven cryptocurrencies. These cryptocurrencies are Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Dogecoin, Bitcoin SV, Ethereum Classic.
Robinhood also announced plans to launch an initial public offering (IPO) that would initially take place in June this year. However, the company postponed plans until July due to the holiday season. According to the Bloomberg source, the company’s strategies could now face a delay until September-December, amid additional studies from the SEC.
The company had confidentially filed a draft IPO registration with the Commission in March this year, and the launch date is still unknown. At the time, it had stated that it would seek a public offering after the SEC scrutinizes its review process, subject to market and other conditions.
According to Bloomberg, it is not rare for companies to see the listing date slip away when their documentation is under revision. Something similar happened to cryptocurrency exchange Coinbase this year when it had to change the date of its direct listing from March to April regulatory approval.
Before the pandemic, Robinhood had raised funds at a valuation of $ 11.7 billion. According to CryptoBriefing, that company has already raised at least $ 40 billion in secondary markets. Meanwhile, Robinhood’s main rival, eToro, is also currently getting ready to go public on the Nasdaq exchange.
After years of speculation, the platform is finally taking firm action to achieve its goal of offering its services to the public. In a statement posted on March 16, eToro Group Ltd. announced their merge with FinTech Acquisition Corp. V, and (SPAC) owned by the famous banker Betsy Cohen.
By: Jenson Nuñez
