Robinhood's crypto transaction revenue soars 232% from a year ago: CNBC Crypto World

Today, the public debut of a crypto wallet maker is postponed after the SEC launches a review. Surging crypto revenue drives Robin Hood to a big earnings beat in the first quarter. And Lou Frangella of Kraken breaks down like companies are turning to Formula One fans to drive crypto adoption. Welcome to CNB CS Crypto World. I’m Mackenzie Sagalos. The crypto market is largely unchanged this morning, with Bitcoin hovering at around $62,000 at noon. Eastern. Ether was flat in the day as well, still trading at $3000. Solana inched slightly higher to 146 dollars. OK, let’s talk about the top stories. Robin Hood’s crypto business helped drive the company to a huge earnings speed in the first quarter. The company reported earnings after the bell on Wednesday, with revenue coming in at $618 million for the quarter compared to estimates of $549 million. EPS came in at $0.18 per share compared to six cents. Expected cryptocurrency trading accounted for $126 million in revenue in the quarter. That is a 232% increase in crypto transaction revenue year over year. Investors jumped in to take advantage of this year’s rally. Robin Hood’s CEO Vlad Tennis joined CAB CS Kate Rooney on last call to talk about the quarter’s huge crypto boom. We were proud of this quarter because it really shows that the strategy is working. And if you remember, we’re focused on three things, winning the active trader market, growing wallet share with our customers and expanding internationally. So crypto was strong. We saw growth in equities and options market share as well, which rounded out the active trader investments we were making. We also had the largest net deposits in the history of the company. So that’s net cash and assets moving into Robin Hood of over $11 billion, which is the highest ever. This huge quarter for Robin Hood also comes as the SEC could be preparing for enforcement action against the trading apps crypto operations. Tenev also addressed the company’s disclosure of Wells notice from the regulator Last weekend we tried to create what’s called a special purpose broker dealer for the purpose of transacting in crypto assets, and we actually came in good faith to meet with the SEC. I think we met with them 16 times and unfortunately that was not reciprocated and it was clear that there didn’t seem to be a path. Next up, Finance reportedly fired an investigator after he uncovered market manipulation. According to the Wall Street Journal, the investigator and his team uncovered pump and dump schemes and wash trading initiated by some of Binance’s VIP clients, those being the largest on the exchange. These kinds of trades are prohibited by Binance’s terms of service, but reportedly happened anyway. One VIP client of Focus was DWF Labs, which reportedly operated as a market maker. Those buy and sell assets and pocket the difference. The Wall Street Journal reports that the investigation team found that DWF was manipulating the price of multiple tokens. The team reported those findings, but insiders told the Journal that Finance instead launched an investigation into the surveillance team. Now, that investigation reportedly concluded that the head of the team collaborated with ADWF competitor and he was subsequently fired toward the end of last year. Finance responded to the report on X saying that it affirms its strict market surveillance program and that its investigations teams job is to be neutral and look at evidence without bias. DWF also responded on X saying that it operates with the highest standard of integrity, transparency and ethics. Also, real quick, we just found out this morning that Canada’s Financial Transactions and Reports Analysis Center handed down a fine of around 4.4 million U.S. dollars over money laundering and terrorism financing violations. It reached out to finance about this, but haven’t heard back yet. Finally, the US public debut of Crypto Wallet Exodus has been postponed. The company behind the Wallet Exodus movement was supposed to list on Thursday in the New York Stock Exchanges American market designed for growing businesses. But on Wednesday, Nicey American told the company that the listing was delayed thanks to a review by the SEC. In a press release, the company CEO JP Richardson said that the firm was surprised and confused by the last minute decision, but that Exodus remains hopeful that the SEC will treat the company as the law intends. Exodus also said in the release that it will reconsider listing on a National Securities Exchange at a future date after the SEC review. But for now, Exodus will keep trading on over the counter markets. All right, let’s talk about crypto and sports for our main story. The Miami Grand Prix took place last weekend and the event was filled with crypto partnerships. Crypto World’s Jordan Smith spoke with Krakens Lou Frangella about why the exchange sees Formula One as the right place to attract crypto interest. So Lou, I’m checking in with you because this is, I believe, the 4th Formula One event in the US that Kraken has been a part of. There have been some others outside the US too, But you were in Miami last weekend for the Grand Prix. You had a fan zone there. Talk about how that event went and what did interest look like at the Miami Grand Prix. Yeah, it the the fan zones that Williams have been doing have been really exciting. I think, you know, when you think about Formula One in general, it’s an inaccessible sport for a lot of people, right? It’s very expensive. It hits certain locations throughout the year, even though they hit a number of different countries, I think over 20. But Williams has created this model with these fan zones that allow free access to fans to come and enjoy and get a taste of Formula One. They bring the drivers, they bring the team principal, There’s a number of activation set up. So when we parted with them, you know we felt like this was a great opportunity to help elevate those experiences. Miami was was absolutely incredible. So you know again free to enter, but we provided some additional free experiences and access to to people that you know have come into the Kraken ecosystem since the partnership. We had about 20,000 attendees of the Fan Zone throughout the week, which I think is is very phenomenal and right on on target with the numbers that you know we’ve seen across the year in terms of its scaling. So it was great. The race itself I think was the highest viewed F1 race in the US of all time. So we definitely, it definitely lived up to the hype. Yeah it it’s been about, it’s been a little more than a year actually since you partnered with Williams, you’ve you’ve done Austin, you’ve done Las Vegas and others and I’m we’ve talked about that partnership on Crypto World in the past, but I want to know how it’s going so far. You mentioned the amount of people that have come to this, these Fan Zone events. You’re talking about the growing viewership of Formula One in the US talk about why this partnership worked for Kraken, what made you so excited for it? Yeah, I mean Williams was was the perfect partner for us. I mean we we obviously had a number of different conversations just generally on you know where to align our brand and they checked all the boxes with us from mission to brand to the values. You know, obviously our mission is to accelerate the worldwide adoption of cryptocurrency to help others achieve financial freedom and inclusion. Williams is very aligned with that mission. You know when we when we were looking at you know why them, you know there’s a number of of factors. One, you know they’re one of the oldest F1 teams in the sport. You know the legacy is, is so important. Obviously, you know we’ve been around for over 12 years, almost 13 at this point as well in the crypto industry. So if you calculate the dog years it adds out to to be sort of the same thing. You know that that mission alignment for us is the actual key to success when it comes to, you know, really furthering it. And Williams was was very aligned with it. You know, we’ve we’ve done a number of things with them last year as I’m sure that you’ve you’ve already discussed. But you know this grid pass program that we’ve created with them is basically a way to to give access and exposure to people to you know, blockchain technology and crypto in a way that’s easy, that’s educational, that’s understandable. That helps further their fandom. So you know, the fact that we’ve been able to build this with them and make it free for people, I I think we’ve seen a lot of success with it. And I don’t think there’s any other partner on the grid out there that you know would would be willing to do something like that and really, you know, match values in that way. What does the overlap look like between a Formula One fan and a crypto fan that that you seem so focused on? Is it really just about the fact that you guys are sort of growing in tandem, there’s a growing Formula One audience and you’re growing at the same time? Or is there something specific about that sport fan that that makes them appealing for advertising in crypto? We found a lot of audience overlap between you know traditional financial users and cryptocurrency users and automotive sports and particularly Formula One. So you know for us it was it was just the perfect way to introduce ourselves to to partnerships and you know having not had done any on on this scale before. So I think that’s what it was to us and obviously you know what we’re trying to do is I think what hadn’t been done in the past is proper education in a way that you know is is unique and really helping folks learn about this great technology and what Kraken is and what crypto is and and how to get started. So I think we want to do that in a way that is respectful and and definitely a way that helps meet them where they are in their journey. So I think for Fan Zones, again on the topic of Fan Zones, for us, it actually provides an opportunity for us to speak face to face with a lot of these people that are current customers or future clients of ours and help answer those questions live on site. And you know, for Kraken, I mean we’re the only crypto company that has live customer support as well. So if there’s more questions that continue after that as they come on to their journey with Kraken and Crypto, they can give us a call there. Do you see an uptick in adoption after these types of events? Has it been successful for you in terms of that goal of educating people and bringing people into the ecosystem? What’s the end result there? It’s been it’s been really successful. You know we we launched this this Williams Racing Collectibles Plus program is the the full digital collectibles program that is completely free to Williams fans. The Grid Pass is the first collectible or NFT within that collection and it basically acts as the key to unlocking the rest of the experiences rewards collectibles that we’ll that we’ll be doing and continue to do to do with Williams. Since launching this around the the Austin race last year in October, we’ve seen over 75,000 Williams fans actually claim a grid pass and continue to be engaged with the program. So it’s definitely been, you know an an incredible way to get people introduced to this space. And we, you know through the fan zones we see, we definitely see an uptick every time we do one with Williams, you know just over the course of that week and and the weeks following that for claims and and grid pass claims. Now before I let you go, I want to talk about something outside of sports. Kraken launched its first consumer campaign a few months ago and I and I just want to check in on that because we we spoke with Kraken at the time when it launched. How is that going so far, especially at this time when you see a real comeback for crypto, you see people interested again. But when you when you launched it, it wasn’t quite the case. I think people were still very skeptical after what happened with the last collapse. So, so talk about where we are so far with that. Yeah, I mean this goes back to we’ve been around for 12 years now. So we’ve seen a number of these different cycles. The campaign for us was see what crypto can be. And I think you know as we continue to develop that messaging and further the mission, you’ll see a development of or a progression of that of that messaging. You know, as we continue to to try to scale that mission. So we remain focused on client education. It’s a pillar for the campaign. You know we can we have a learn center that has been refreshed a couple months ago that’s a great resource for people to learn about crypto. And I think you know as one of the the the most tenured stewards in the space and as large as we are. I think we we owe it to to everyone you know in line with that mission to help further that in a way that is a is a progression of that. OK, that’s all for Crypto World today, but we’ll be back again tomorrow and we’ll see you then.