Robinhood Has $26B Worth of Crypto Asset in Custody, Q1 Report Shows

Crypto exchange Robinhood released its first quarterly report for the year on Wednesday. Among the catchy details of the report is its disclosure that it has over $26 billion worth of customer crypto assets in custody.

Robinhood reported a revenue boost for the second straight quarter as the crypto market recovered from its prolonged bear market. The crypto firm also beat analyst estimates in almost all its parameters for Q1, as fellow exchange Coinbase did.

The report came a few days after Robinhood received a Wells Notice from the US Securities and Exchange Commission (SEC). The Wall Street top regulator alleged that the crypto exchange violated the Securities Exchange Act of 1934.

Revenue Boost

Robinhood’s Q1 report reveals a remarkable 59% year-over-year growth in transaction-based revenue, reaching a substantial $329 million for the quarter. This impressive performance was driven by increased earnings in cryptocurrency and options transaction revenues, with the exchange generating $126 million and $154 million, respectively, from these sectors.

Robinhood also earned $36 million in notion crypto trading volume for Q1, up 224% year-over-year. The exchange saw a net deposit of $11.2 billion in the first quarter, a 44% annualized growth rate. Robinhood posted a net income of $157 million against a $511 million net loss seen in the first quarter of last year.

“We delivered significant revenue growth and margin expansion in Q1 as we remain focused on driving another year of profitable growth,” Robinhood’s CFO, Jason Warnick, said in reaction to the Q1 report on Wednesday.

Business as Usual for Robinhood

Warnick expressed disappointment with the Wells Notice issued by the SEC but stated that it has not affected its operations, and it has been “business as usual” for the exchange since then.

“We’ve been very conservative in our approach in terms of points listed and services offered.  And we’re a highly regulated company and have applied the same legal and compliance standards we use for our brokerage to the way we run our crypto. So it’s disappointing to see more regulation by enforcement,” Warnick stated.

Robinhood’s shares soared 7% after the release to trade at $18.8. HOOD is up over 50% in the past six months.