Consumer trading and investment app Robinhood is moving to restrict the holding and trading of certain major cryptocurrencies on its platform, barely a week after the U.S. Securities and Exchange Commission’s lawsuits against crypto exchanges Binance and Coinbase. The platform told Congress earlier this week that it was examining its crypto offerings following the lawsuits.
There are two easy perspectives one can have in the wake of Robinhood’s decision to end support for tokens from the Polygon, Solana and Cardano blockchains: That the company is being too skittish, or that it’s making a calculated business decision.
After reviewing Robinhood’s most recent quarterly results, we feel that the decision is backed by some amount of reason.
Robinhood is not new to being poked by the government. During the meme-stock mania, the company was dragged before Congress to be questioned about its trading controls and its willingness to offer sophisticated trading tools to less sophisticated investors. Given this less exciting asset trading market, the company is likely loath to invite renewed interest from regulators and lawmakers.
But that is just one piece of the puzzle. Robinhood only needs to do a simple risk-reward calculation: It’s likely that the company simply doesn’t derive enough revenue from consumers trading these tokens to take the effort to defend them.
Robinhood did not immediately respond to a request for comment.
