In its S-1 securities registration form for initial public offering (IPO) filed with the Securities and Exchange Commission (SEC) on Thursday, the company said that a significant portion of its revenue in the first quarter of 2021 is due to high demand in Dogecoin transactions. The zero-commission trading app currently supports the buying and selling of seven crypto assets, including Bitcoin (BTC) and Ethereum (ETH). Still, the document shows that 34% percent of the company’s cryptocurrency transaction-based revenue was generated by the Shiba Inu themed crypto asset. The company’s earnings from crypto transactions also account for 17% of its total revenue for the first three months of the year, marking a significant growth from just 4% in the last three months of 2020.
Adverse impact of changes in DOGE market and evolving crypto industry
With Dogecoin’s significant contribution in driving up the company’s earnings, Robinhood warned that changes in the DOGE market could have adverse effects on its business. It also noted that the crypto industry continues to evolve and changes in laws and regulations could also impact its business.
Lawsuits and investigations
Robinhood is currently facing dozens of proposed class-action lawsuits and investigations. The IPO filing also revealed that federal authorities seized the phone of its CEO Vlad Tenev as part of the GameStop trading probe. The company halted the trading of GameStop and other so-called meme stocks in January because it did not have the capital required to cover the requested trading volume. Investors, as a result, filed lawsuits claiming that the action was unfair and unlawful. [binance]
