The planned initial public offering (IPO) of US trading platform Robinhood has hit another snag as its growing crypto business is facing inspection from regulators.
A Bloomberg report on Thursday cited people familiar with the matter who said the Securities and Exchange Commission (SEC) has been asking questions about the firm’s crypto trading operation as part of the review process for listing.
READ: Robinhood files IPO paperwork as it looks to capitalise on retail investor revolution
The scrutiny means the firm’s float, which was originally planned for the summer, could be pushed back into the Autumn.
Robinhood’s situation follows a trend of extreme caution by US regulators around cryptocurrencies, with multiple exchange-traded funds connected to digital currencies also getting bogged down in the SEC’s review process.
The crypto trading arm of Robinhood, which launched in 2018, also threatens to add to the app's reputation as a service that ‘gamifies’ trading and lures in young and inexperienced investors who can then buy very volatile assets and suffer huge losses.
Robinhood’s influence on the retail trading market rose to prominence earlier this year when thousands of retail traders used its services to purchase shares in GameStop Corp (NYSE:GME) as part of a trading frenzy instigated by the Reddit community r/wallstreetbets.