Robinhood files for IPO and claims that a large portion of its crypto-related revenue is due to Dogecoin

Robinhood plans to allocate 20% to 35% of its IPO shares to retail customers, and the offering is led by Goldman Sachs, JPMorgan Chase, Barclays, Citigroup, Wells Fargo, Mizuho Bank and others.

The company said it has 17.7 million monthly active users, more than 50% new users and $81 billion in assets. A surge in day trading and new users last year helped Robinhood’s revenue jump 245% to $959 million from $278 million in 2019.

Robinhood also said that 17% of its trading-based revenue came from cryptocurrencies in the first quarter of 2021, with Dogecoin being a large portion of its crypto-related revenue. During the same period, more than 9.5 million users traded approximately $88 billion in cryptocurrencies.

The filing reads: "A significant portion of our recent growth in net revenue from cryptocurrency trading is attributable to Dogecoin trading. If demand for Dogecoin trading declines and is not replaced by new demand for other cryptocurrencies supported by our platform, our business, financial condition and operating results may be adversely affected."

Just one day before the IPO announcement, FINRA ordered Robinhood to pay a roughly $70 million fine and to reimburse customers who allegedly suffered “extensive and substantial harm.” Robinhood reported in its filing that it had reached an agreement in principle with the regulator to pay a $57 million fine but only $4.5 million in reimbursement to affected users.

Robinhood is also facing multiple lawsuits from regulators, state governments and individuals over the platform's outages, account takeovers and trading restrictions related to the GameStop stock controversy. The company said it expects to pay $15 million to the New York State Department of Financial Services for "anti-money laundering and cybersecurity related issues."

The IPO filing with the SEC comes as the regulator’s staff conducts a review of Robinhood and other issues related to its business.

The value of Bitcoin and other cryptocurrencies held by Robinhood on behalf of its customers has increased significantly, reaching nearly $11.6 billion as of March 31, up from $480 million a year ago, according to Robinhood's S-1 filing with the SEC.