KBW Broker Predicts Robinhood’s Victory Over US SEC in Ongoing Case

KBW analysts have predicted that Robinhood Markets Inc. will engage in a court battle with the United States Securities and Exchange Commission (SEC) and emerge victorious. The analysts noted that although Robinhood only offers trading for 15 cryptocurrencies, it is expected to continue providing this service.

KBW also indicated that the SEC will file a lawsuit against Robinhood in the coming months, following the Wells notice it received regarding its crypto business. However, the analysts led by Kyle Voigt stated that Robinhood does not heavily rely on crypto trading for revenue generation.

In fact, crypto trading only contributes about 12% of Robinhood’s quarterly revenue. As a result, the stock price of HOOD remained relatively stable in the past 24 hours, trading around $17.80 on Tuesday.

The analysts expressed their belief that Robinhood is likely to challenge the SEC in court and has a higher chance of success compared to other US competitors facing similar situations, thanks to its stricter listing standards.

Looking ahead, the debate surrounding whether Ethereum (ETH) should be classified as a security or a commodity has intensified in the US. The SEC argues that Ether is a security due to the efforts of individuals working towards its success, including the existence of a website and social media influencers.

On the other hand, Consensys, through its lawsuit against the SEC, asserts that Ethereum is a global computing platform and not an investment scheme. If the court ruling favors the SEC, Robinhood would be compelled to make significant changes to its operations.

According to the report, the worst-case scenario for Robinhood’s revenue would be if the SEC categorizes Ether as a security, as it represents approximately 25% of HOOD’s crypto assets and trading.

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Crypto Regulations