Investing platform Robinhood had its sights set on filing for an initial public offering (IPO) this month but the public offering is being stalled as the U.S. Securities and Exchange Commission (SEC) probes the startup about its cryptocurrency unit, Fortune reported, citing anonymous sources from a Bloomberg report.
The listing could happen before the summer is over, but it might be pushed ahead to the autumn months, according to one source, per Fortune. Robinhood filed confidentially for an IPO in March.
The Silicon Valley startup launched cryptocurrency trading about three years ago and now lets users trade bitcoin, Ethereum, and Dogecoin. New SEC Chair Gary Gensler is expected to execute several rulings regarding crypto, Fortune reported.
About 1.7 million Robinhood users took to the app for trading cryptocurrencies in the last quarter of 2020, according to Gizmodo. During the first quarter of this year, users trading cryptocurrencies on the app hit 9.5 million.
The digital investment startup had anticipated that it would file IPO paperwork in time to launch an offering this month. The SEC indicated in May that it was planning to probe retail brokerage apps.
Robinhood recently implemented restrictions on investors who unload holdings in less than 30 days after an IPO. Users that do could face being closed out of investments for up to 60 days. Too many investors quickly flipping shares also could prompt the company to offer fewer IPO opportunities.
Robinhood’s mission of offering investment opportunities to investors new to the market was further advanced by its new product launch called IPO Access tool, which started gradually rolling out in May. The new tool enables investors to participate in upcoming IPOs without having to satisfy minimum account balances.