86 paragraphs in Risk Factors of the 10-K filed Feb 18, 2026
with nothing like them in the 10-K filed Feb 18, 2025. Quoted exactly.
Paragraphs that were only edited are under 10-K change.
Compared with the Risk Factors in the latest 10-K of the other 75 Financials companies:
a paragraph with at least half its words the same at another company is called similar, and the companies are listed under it.
A paragraph most of them have is marked boilerplate. No line means no other company has one like it.
This counts text; it does not say how serious a risk is.
Show the other 26
Risks Related to Negative Publicity Associated with PFOF, Transaction Rebates or our Liquidity Providers
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of PFOF or market structure design have generated and might continue to generate negative publicity associated with PFOF.
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Further, RHEU and Bitstamp Europe S.A., are licensed crypto asset service providers under the EU’s MiCA, the provisions of which went into effect as of December 30, 2024. Among other requirements,
RHEU and Bitstamp Europe S.A. are subject to mandatory capital requirements that vary based on the services we provide. Failure to meet these capital requirements or any future increases to these requirements could limit our ability to obtain or maintain authorization, constrain operational flexibility, or result in penalties or sanctions.
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conditions might cause individuals to be less proactive in seeking ways to improve the returns on their trading or investment decisions and, thus, decrease the demand for our products and services.
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Rothera, owned and operated as a joint venture with SIG, operates a futures and derivatives exchange and clearinghouse through its subsidiary, Rothera E&C. We do not wholly own or operationally control Rothera and its subsidiaries, and actions taken by Rothera and its subsidiaries could adversely affect our business, financial condition, results of operations, and reputation.
On November 19, 2025, Robinhood invested in Rothera, a joint venture established to operate an independent and institutional-grade futures and derivatives exchange and clearinghouse. On January 20, 2026, Rothera acquired 90% of the issued and outstanding equity of Rothera E&C, a CFTC-licensed DCM, DCO, and SEF to accelerate delivery of futures and derivative product offerings, including prediction markets.
Rothera is an independent entity with its own management team and employees responsible for the day-to-day operations of the joint venture. While Robinhood is entitled to designate a majority of the members of the board of directors of Rothera and one representative to serve on the board of directors of Rothera E&C, and expects to exercise governance control at Rothera’s board level and as otherwise set forth in Rothera’s governance documents, we will not have decision-making authority over all operational, strategic, or commercial decisions made by Rothera or any of its subsidiaries, and certain decisions may be subject to applicable regulatory requirements or require the consent of SIG and other holders of the equity of Rothera and its subsidiaries, any of whom may have economic or other business interests that are inconsistent with ours.
Although we do not own a majority of Rothera’s equity interests and Rothera’s day-to-day operations are conducted by its management team, we designate the majority of the members of its board of directors which exercises governance control over Rothera, and thus consolidate the financial results of
Rothera and its subsidiaries into our consolidated financial statements. As a result, any failure by Rothera or its subsidiaries to operate effectively, comply with applicable laws or regulations, maintain adequate internal controls, manage liquidity or capital requirements, or successfully execute their business strategy, could adversely affect our business, financial condition, results of operations, and reputation.
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challenges due to the need to operate with a dispersed and remote workforce, as well as increased costs related to business continuity initiatives.
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We operate in highly regulated industries and, despite our efforts to comply with applicable legal requirements, like all companies in our industries, we must adapt to frequent changes in laws and regulations, and face complexity in interpreting and applying evolving laws and regulations to our business, heightened scrutiny of the conduct of financial services firms and increasing penalties for violations of applicable laws and regulations. We might fail to establish and enforce procedures that comply with applicable legal requirements and regulations. We might be adversely affected by new laws or regulations, changes in the interpretation of existing laws or regulations, or more rigorous enforcement. Furthermore, the U.S. Congress continues to consider potential legislation relating to digital assets and cryptocurrencies. For example, on July 17, 2025, the House of Representatives passed the CLARITY Act, which seeks to provide for a system of regulation of the offer and sale of digital assets by the SEC and CFTC and establish a provisional registration regime. The CLARITY Act is currently under consideration by the U.S. Senate, where the Senate Committee on Banking, Housing, and Urban Affairs released preliminary discussion drafts on July 22, 2025, September 5, 2025, and January 12, 2026, of its proposed “Digital Asset Market Clarity Act” that builds upon the CLARITY Act. On January 29, 2026, the Senate
Committee on Agriculture, Nutrition, and Forestry voted in favor of advancing its proposed “Digital Commodity Intermediaries Act,” which likewise builds upon the CLARITY Act. Additionally, on July 18, 2025, the President signed into law the GENIUS Act, which establishes a federal regulatory framework for “payment stablecoins” and their issuers, as well as contemplates scope for state-only regulation. If the CLARITY Act or any of the related bills discussed above are enacted, or as the GENIUS Act is implemented, we could be required to make significant operational changes and incur increased compliance costs. Our ability to offer certain products may also be impacted by actions taken by government regulators. Regulators have requested and, in the future, could request or require us to cease offering specific products or services. Such regulatory actions have led, and in the future could lead, to the suspension or termination of product offerings, which have resulted, and may in the future result in increased compliance costs, financial losses and negative publicity. For example, after the U.S. District Court for the District of Nevada denied our motion for a preliminary injunction on November 25, 2025, we agreed to cease offering new sports-related event contracts in Nevada as of December 1, 2025, and to take action to explore unwinding longer-duration open sports-related event contracts in Nevada. For additional information, refer to Note 15 - Commitments & Contingencies to our consolidated financial statements in this Annual Report.
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As investment firms and crypto-asset service providers, our subsidiaries RHEU, Bitstamp Europe S.A., Bitstamp Financial Services Ltd., Bitstamp Asia Pte. Ltd., and Bitstamp UK Limited are subject to extensive regulation by regulators in Lithuania, Luxembourg, Slovenia, Singapore, and the U.K., respectively. Specifically, our subsidiaries, RHEU and Bitstamp Europe S.A., are licensed crypto asset service providers under MiCA, the provisions of which went into effect as of December 30, 2024. Among other provisions, MiCA introduces a comprehensive authorization and compliance regime for crypto-asset service providers, including requirements related to governance, reserves, capital, asset safeguarding, segregation and security. In addition, our subsidiaries, RHEU and Bitstamp Financial Services Ltd., are licensed under MiFID to provide brokerage, multilateral trading facilities and/or investment advisory services. Compliance with MiFID imposes extensive regulatory requirements on our operations in the EU, including obligations related to client classification, product governance, transaction reporting, and best execution standards. As a result of holding both MiCA and MiFID licenses, we are subject to comprehensive regulation covering virtually all financial and crypto activities within the EU. This dual licensing framework subjects us to broad and evolving supervisory regimes governing traditional financial instruments, crypto-assets, client protections, disclosure obligations, and operational standards. As we continue to evaluate and align our licensing and supervisory frameworks in the EU, including assessing the optimal structure for our MiCA and MiFID entities, we will face periods of overlapping or evolving regulatory oversight, which could result in increased compliance costs, operational burdens, and extended approval timelines in connection with any changes.
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•In March 2025, we settled multiple matters with FINRA (including investigations into RHF’s historical practice of collaring market orders, CIP, use of certain social media influencers, delivery of certain regulatory required documents to customers, and origin code designations for professional customers; RHS’s supervision of its clearing system technology, improper rejection of certain ACATS requests, improper effectuation of trades in securities during trading halts, execution of trades during extraordinary market volatility at prices that were above or below specified price bands, and the maintenance and reporting of inaccurate or incomplete trade, order, and position data to FINRA, FINRA TRF, CAT, Central Repository, and the OCC; and both broker-dealers’ AML programs, registration of required personnel, and supervision of trading in associated persons’ brokerage accounts) (together, the “March 2025 FINRA Settlement”). RHF
and RHS paid a penalty totaling $26 million, and agreed to pay restitution of approximately $3.76 million to customers plus interest and certain undertakings.
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promote behavior that is not in the interest of the customer, such as excessive trading, and whether expanded enforcement mechanisms are necessary; and digital engagement practices. Although the SEC, under the current administration, withdrew certain notices of proposed rulemaking that were issued under the former SEC Chair, if the SEC enacts similar rules in the future, whether in this current or future administration, such rules could impose additional regulatory requirements on our business and operations and could require us to make significant changes to our business model and practices. Additionally, from time to time, we have received requests from regulators, including from the SEC, regarding our collection and uses of customer data and related disclosures.
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Our ability to offer event contracts is subject to the outcome of currently ongoing and potential future regulatory enforcement actions and litigation, as well as potential changes in federal or state law, that could immediately or subsequently prevent us from offering, or continuing to offer, event contracts.
Similar paragraph at 1 of 75 other Financials companies:
IBKREvent contracts, whether offered by us or others, have drawn scrutiny from federal and state regulators and resulted in litigation that we are party to as well as litigation against other companies that offer event contracts. In particular:
•After we began to offer certain event contracts in October 2024 related to the U.S. presidential election and in March 2025 related to the annual NCAA college basketball tournaments, we received requests for information and a subpoena from the MSD, respectively.
•In February 2025 after we began offering sports-related event contracts tied to the pro football championship, the CFTC formally requested that RHD “not permit customers to access” sports-
related event contracts “until staff can complete a review,” leading us to suspend the rollout of that product. After we began offering sports event contracts tied to the annual NCAA college basketball tournaments in March 2025 and provided the CFTC with certain information and documents, the CFTC indicated it lacked a “legal justification” to prevent us from offering access to those event contracts.
•In March 2025, the NJDGE issued a letter to RHM demanding that we, among other things, cease and desist from offering sports-related event contracts, which the NJDGE views as unlicensed sports wagering under state law. Other state regulators with authority over sports wagering, including in Ohio and Connecticut, have since sent RHM and/or RHD similar demand letters.
•On April 8, 2025, the U.S. District Court for the District of Nevada issued a preliminary injunction in KalshiEx, LLC v. Hendrick, et al. preventing the Nevada Gaming Commission and Nevada Gaming Control Board from enforcing Nevada state laws and pursuing civil or criminal liability against KalshiEx, LLC for offering sports-related event contracts because the Commodity Exchange Act (“CEA”) grants the CFTC exclusive jurisdiction over event contracts that are traded or executed on a designated contract market and the CFTC has impliedly approved the contracts. On November 25, 2025, the court dissolved KalshiEx’s preliminary injunction. KalshiEx has appealed the decision. On February 17, 2026, the Nevada Gaming Control Board filed a civil enforcement suit against KalshiEx seeking injunctive relief to enjoin KalshiEx from offering outcome-based event contracts. KalshiEx has removed the action to federal court. KalshiEx filed for similar injunctive relief in New Jersey, Maryland, Ohio, New York, Connecticut, and Tennessee. On April 28, 2025, the federal district court in the New Jersey lawsuit, KalshiEx LLC v. Flaherty, et al., issued a preliminary injunction against the New Jersey gaming regulators concluding that KalshiEx has demonstrated a likelihood of prevailing on its preemption arguments. The New Jersey gaming regulators have appealed this decision to the Third Circuit Court of Appeals, which heard oral argument in September 2025. The U.S. District Court for the District of Maryland denied KalshiEx’s motion for injunctive relief and KalshiEx has appealed this decision to the Fourth Circuit Court of Appeals. KalshiEx has also been sued by the Massachusetts Attorney General seeking to enforce Massachusetts state gaming laws. On January 20, 2026, the Massachusetts Superior Court granted Massachusetts’ motion for a preliminary injunction. The injunction was issued on February 6, 2026, and an appeal has been noticed. On February 17, 2026, the Massachusetts Appeals Court stayed the injunction pending appeal. In Tennessee, KalshiEx’s motion for a temporary restraining order was granted on January 12, 2026.
•On October 14, 2025, the U.S. District Court for the District of Nevada denied motions by North American Derivatives Exchange, Inc. (“Crypto.com”) for a judgment on the pleadings and a preliminary injunction because the Court found Crypto.com’s sports-related event contracts are not “swaps” falling within the CFTC’s exclusive jurisdiction. The district court found that Crypto.com was unlikely to prevail on its argument that the CFTC has exclusive jurisdiction over sports-related event contracts. Crypto.com has appealed the decision to the United States Court of Appeals for the Ninth Circuit.
•On January 16, 2026, the Nevada Gaming Control Board filed a civil enforcement action in Nevada state court against Blockratize, Inc. d/b/a Polymarket; QCX LLC d/b/a Polymarket US; and Adventure One QSS, Inc. d/b/a Polymarket (together "Polymarket") seeking injunctive relief to enjoin Polymarket from offering outcome-based event contracts. On January 29, 2026, the Nevada State Court issued a temporary restraining order against Polymarket. On February 5, 2026, Polymarket removed the case to the U.S. District Court for Nevada.
•On February 2, 2026, the Nevada Gaming Control Board filed a civil enforcement action in Nevada state court against Coinbase seeking injunctive relief to enjoin Coinbase from offering outcome-based event contracts. On February 4, 2026, Coinbase filed a complaint against Nevada in the U.S. District Court for the District of Nevada seeking to enjoin Nevada's civil enforcement action. On February 5, 2026, the Nevada state court issued a temporary restraining
order against Coinbase. On February 7, 2026, the U.S. District Court for Nevada dismissed Coinbase's suit.
•On August 19, 2025, RHD filed suits in the U.S. District Court for the District of Nevada and the U.S. District Court for the District of New Jersey seeking injunctive relief similar to the relief sought by KalshiEx. On September 15, 2025, RHD filed suit in the U.S. District Court for the District of Massachusetts seeking similar injunctive relief. New Jersey has agreed to a preliminary injunction pending the outcome of its appeal to the Third Circuit in its litigation with KalshiEx. In Nevada, the court denied RHD’s motion for a preliminary injunction and RHD has appealed the decision to the United States Court of Appeals for the Ninth Circuit. Nevada has agreed to refrain from enforcing its state gaming laws during the pendency of the appeal, subject to certain conditions which included ceasing to offer new sports-related event contracts (absent an injunction pending appeal staying an enforcement action, which RHD has sought from the Ninth Circuit). In Massachusetts, the court initially dismissed RHD’s suit as unripe. RHD moved for reconsideration, and the court granted that motion. Pursuant to the court’s order, RHD filed an amended complaint on January 20, 2026 and renewed its motion for a preliminary injunction.
•We are also subject to and have been named as a defendant in lawsuits by private plaintiffs and certain Indian tribes alleging statutory and regulatory violations, including that our sports event contracts constitute illegal sports betting, and seeking, among other things, damages (including under “statute of Anne” laws providing for triple damages) and injunctive relief. In one of those cases, Blue Lake Rancheria v. Kalshi Inc., the U.S. District Court for the Northern District of California denied the plaintiff’s motion for a preliminary injunction prohibiting the trading and execution of sports-related event contracts on tribal lands, finding that the CEA confers exclusive jurisdiction over the regulation of such contracts to the CFTC. The plaintiff has appealed that ruling to the Ninth Circuit Court of Appeals, and briefing is ongoing.
The outcome of these cases or new laws or regulations, changes in the interpretation of existing laws or regulations, or more rigorous enforcement in this space could immediately or subsequently prevent us from offering, or continuing to offer, some or all types of event contracts in the future, including in specific states. In particular, additional federal or state courts, including appellate courts, may conclude that state laws attempting to prevent the trading of CFTC-regulated sports-related event contracts are not preempted by the CEA, or that outcome based event contracts are not “swaps” or contracts in excluded commodities falling within the jurisdiction of the CFTC, which would likely require us to cease offering certain event contracts in one or more states (or across all jurisdictions in which we operate) and could lead to adverse litigation and regulatory actions against us for doing so. Any such decision(s) could also result in us becoming subject to various new state-specific regulations relating to or implicating other event contracts, which would further limit our ability to offer access to event contracts within such state(s). Changes in CFTC or other regulatory policy that seek to ban or more heavily regulate event contracts, particularly event contracts that we offer such as those related to sporting events, could also require us to cease offering event contracts or materially impact our ability to offer event contracts and we may be required to cease offering such contracts in one or more jurisdictions in which we operate either immediately or with minimal advanced notice to customers. The CFTC has previously proposed a rule amendment that, if adopted by the CFTC as proposed, would likely have prohibited us from offering sports and election event contracts (similar to the ones we offered in November 2024). While the CFTC withdrew this proposed rule amendment on February 4, 2026, it also announced that it intends to engage in further event contract rulemaking. In the future, the CFTC could also take broader and more expansive actions with respect to these or other event contracts without notice at any time. Further, the tax treatment of event contracts is unclear, and unfavorable interpretations of tax laws or regulations by foreign or U.S. federal or state tax authorities could result in income and other taxes being imposed on Robinhood, our counterparties and our customers. If our ability to offer event contracts (either entirely or in certain categories) in one or more jurisdictions in which we operate is threatened, the perception of our brand may suffer and we may be unable to retain customers, and we may incur significant costs to attempt to continue listing some or all such event contracts. Any of these outcomes could have an adverse effect on our business, financial condition and results of operations.
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data security is limited. In addition, these third-party service providers might rely on subcontractors to provide services to us that face similar risks.
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license fees to third parties. The evolving legal, regulatory and compliance framework for AI technologies may also impact our ability to protect our own data and intellectual property against infringing use.
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connection with fractional share trading and stock lending, which resulted in RHS paying combined monetary penalties of $33.5 million and agreeing to certain undertakings. Furthermore, as part of the March 2025 FINRA Settlement, RHS resolved multiple matters with FINRA, including RHS’s supervision of its clearing system technology, improper rejection of certain ACATS requests, improper effectuation of trades in securities during trading halts, execution of trades during extraordinary market volatility at prices that were above or below specified price bands, and the maintenance and reporting of inaccurate or incomplete trade, order, and position data to FINRA, FINRA TRF, CAT, and OCC, and RHS’s AML program, registration of required personnel, and supervision of trading in associated persons’ brokerage accounts. RHS, along with RHF, paid a penalty totaling $26 million and agreed to pay restitution and to certain undertakings to resolve these investigations, among others.
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As a result of our acquisition of Bitstamp, we now provide additional cryptocurrency products and services to institutional customers both in parts of the U.S. and internationally, including products and services such as retail lending, on-exchange lending, off-exchange settlement, post-trade settlement, and perpetual futures exchange. These offerings to certain institutional clients expose us to risks we have not historically faced at scale, including credit risk.
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Risks associated with providing investment advice and recommendations include those arising from how we disclose and address possible conflicts of interest, inadequate due diligence, inadequate disclosure, and human error. The Advisers Act and its related rules and interpretations impose a fiduciary duty on our provision of investment advisory services to advisory clients. Other regulations, such as the SEC’s Regulation Best Interest and certain state broker-dealer regulations, impose heightened conduct
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Our wholly-owned subsidiary, RHV, serves as the investment adviser to RVI, a closed-end investment company, which will subject us to additional burdens and risks and could subject us to potential liability.
RHV, an investment adviser registered with the SEC under the Advisers Act, serves as the investment adviser to RVI (the “Fund”). The Fund is a recently organized Delaware statutory trust registered under the 1940 Act, as an externally managed, non-diversified, closed-end investment company. RHV is responsible for making investment decisions for the Fund’s portfolio. RHV was formed in August 2025 and has limited investing history. RHV’s service as an investment adviser to the Fund will subject us to additional burdens risks and could subject us to potential liability, including but not limited to:
•We will become further subject to additional regulatory and compliance burdens. For example, the Fund is registered under the 1940 Act as an investment company. The Fund and its investment adviser, RHV, are subject to the 1940 Act and the rules thereunder, which, among other things, regulate the relationship between a registered investment company and its investment adviser and their respective affiliates and prohibit or severely restrict principal transactions and joint transactions.
•RHV was recently formed and while its personnel have investment experience, RHV and its management have limited experience managing a closed-end investment company registered under the 1940 Act.
•RHV or its directors, officers or employees and its affiliates, successors or other legal representatives may be liable for any error of judgment, for any mistake of law or for certain types of acts or omissions by such person.
•RHV provides certain investment advisory, management and administrative services to the Fund pursuant to an investment advisory agreement but its provision of those services to the Fund can be terminated without penalty as specified in the investment advisory agreement. In addition, if the investors in the Fund were to be dissatisfied with the investment performance or disagree with investment strategies employed by RHV, they may seek to cause the board of directors of the Fund to terminate its investment management agreement with us or change the terms of such agreement in a manner that is less favorable to us.
•The timing and amount of management fees generated by the Fund are uncertain and depend on the success of the Fund’s initial public offering and the Fund’s investment performance.
•Shareholder activism involving closed-end funds has increased, including public campaigns to demand that a fund consider significant transactions such as a tender offer, merger or liquidation or seek other actions such as the termination of the fund’s investment management contract.
•Investments held by the Fund are illiquid, private investments and thus have no readily ascertainable market prices. The actual results related to any particular investment often vary materially. Because there is significant uncertainty in the valuation of, or in the stability of the value of, illiquid investments, the fair values of such investments as reflected in the Fund’s NAV do not necessarily reflect the prices that would actually be obtained by the Fund when such investments are realized and may contribute to a disconnect between NAV and the market price of the Fund’s shares, volatility in the Fund’s NAV or market price, negative investor perceptions of the Fund’s performance and reduced investor confidence in us or the Fund, which could in turn result in difficulty in raising additional funds, reputational harm, and increased risk of litigation or other claims against us, RHV, or the Fund.
Similar paragraph at 1 of 75 other Financials companies:
BX•The Fund is subject to conflicts of interest. Our business activities in the management of, or our interest in, our own business and accounts, may present conflicts of interest that could disadvantage the Fund and its shareholders. We provide brokerage services to retail investors that may follow investment programs similar to that of the Fund. RHV and its affiliates will be permitted to market, organize, sponsor, act as general partner or as the primary source for transactions for other pooled investment vehicles and other accounts, which may be offered on a public or private placement basis, and to engage in other investment and business activities. Some of these funds and accounts may have investment strategies that overlap with the investment strategies of the Fund. Such activities may raise conflicts of interest for which the resolution may not be determinable.
•If the Fund performs poorly or does not achieve expected returns, investors may decline to invest in any future closed-end funds we may raise or otherwise attribute the Fund’s performance to Robinhood more generally.
Any of these additional burdens and risks could subject us to potential liability and could harm our reputation and business.
Our provision of brokerage and custodial services to RIAs exposes us to operational, regulatory and reputational risks.
Our provision of brokerage and custodial services through TradePMR to RIAs and their clients is subject to extensive federal and state regulation, including oversight by the SEC, FINRA, and applicable state securities regulators. Regulatory changes or enhanced enforcement activity may require significant system changes, and increased compliance resources, which could materially affect our business operations and results of operations. Non-compliance with applicable regulations by us or by TradePMR’s clearing firm, Wells Fargo Clearing Services, LLC, could result in censures, fines, or reputational harm.
We rely heavily on proprietary and third-party technology platforms to provide brokerage, custodial, and administrative services. A failure in these systems, including outages, cyberattacks, data breaches, or programming errors, could interrupt our operations or those of our RIA clients, resulting in financial losses, regulatory exposure, or damage to our relationships with advisors and end clients.
Possessing client assets and sensitive personal information exposes us to cybersecurity threats and data privacy obligations. A breach of our systems or those of our vendors could result in unauthorized access to confidential information, potentially triggering legal liabilities, regulatory investigations, remediation costs, and reputational harm. Continued investment in information security infrastructure and incident response protocols is necessary to mitigate this risk.
We may be subject to regulatory actions, legal claims, and arbitration proceedings arising from the actions or omissions of RIAs to whom we provide custodial support. We provide investment advice to end clients through RAM and RHV, and although we do not provide such investment advice through TradePMR, disputes may nevertheless arise regarding account management, trade execution, or data integrity. Any such claims could result in costly litigation, adverse judgments, or settlements.
Our revenue from custodial relationships is largely dependent on assets under custody, cash balances, and the trading activity of advisory clients. Adverse market conditions, rising interest rate volatility, or shifts in client behavior may reduce trading volumes or asset levels, which could negatively impact our fee-based and spread income.
Our ability to retain and grow our RIA client base depends in part on our reputation for service quality, platform stability, and regulatory compliance. Negative publicity, including but not limited to negative publicity arising from operational failures, regulatory sanctions, or advisor misconduct, may harm our brand and result in the loss of key relationships or reduced advisor onboarding.
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We hold all settled cryptocurrencies in custody on behalf of customers in two types of wallets: (i) hot wallets, which are managed online, and (ii) cold wallets, which are managed entirely offline and require physical access controls. With the exception of Bitstamp (discussed below), Robinhood does not utilize third-party custodians for settled cryptocurrencies, but does integrate proprietary technology from a third-party industry-standard vendor into the systems Robinhood uses to support the custody, transfer and
settlement operations of its wallets. As noted, Bitstamp does use third party custodians. Failures, problems or issues at these third party custodians could subject Bitstamp to various forms of risk and may have a significant impact on Bitstamp’s business and reputation, which, in turn, could harm Robinhood’s business and reputation more broadly.
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In June 2025, we started offering leverage to customers of RHEU and Bitstamp Financial Services Ltd investing in crypto-asset perpetuals. By permitting customers to invest in crypto-asset perpetuals with the use of leverage, both our customers and we are subject to certain risks, especially during periods of extreme volatility in the crypto-asset markets.
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We currently facilitate customer trades for certain cryptocurrencies that we have analyzed under applicable internal policies and procedures and, for cryptocurrencies supported on our RHC and Bitstamp US platforms, that we believe are not securities under relevant U.S. federal and state securities laws. Determining whether any given cryptocurrency is a security is a highly complex, fact-driven analysis, which may change and evolve over time based on changes in the cryptocurrency and its related ecosystem and on evolving legal and regulatory developments. Different parties may reach different conclusions about the outcome of this analysis based on the same facts. The analysis may become clearer depending on the outcome in certain cases currently pending in varying stages of litigation. The SEC Staff has indicated that the determination of whether or not a cryptocurrency is a security depends on the characteristics and use of that particular asset. The SEC, individual Commissioners and the SEC Staff have previously taken positions that certain cryptocurrencies are “securities” in the context of settled or litigated enforcement actions. Although the SEC had not historically provided advance confirmation on
the status of any particular cryptocurrency as a security, speeches by senior officials at the SEC have indicated that the SEC generally does not consider Bitcoin or Ether to be securities and Staff of the SEC’s Division of Corporation Finance published statements clarifying that the Division does not view the offers and sales of certain “stablecoins” and “meme coins” to constitute securities transactions. Moreover, SEC Staff have authored informal, non-binding “no-action” letters to the promoters of a handful of digital assets to the effect that the Staff would not recommend enforcement action to the SEC on the basis that transactions in such digital assets, as described to the Staff by their respective promoters, are securities transactions, including with respect to the issuance of tokens in connection with internet and energy decentralized physical infrastructure projects and a consumer finance rewards program. However, such statements and views are not official policy statements by the SEC and reflect only the SEC Staff’s and speakers’ views, which are not binding on the SEC or any court or other agency (including, for instance, the NYDFS, which recently published a consumer alert concerning meme coins that did not opine on whether meme coins constituted securities but warned consumers of the risks of such coins), may be withdrawn at any time without notice or comment by the SEC or its senior officials, cannot be generalized to any other cryptocurrency, and might evolve (including, for instance, recently enacted legislation provides guidelines for the regulation of stablecoins in the U.S., which may differ from the views set forth in the SEC Staff statement regarding stablecoins). With respect to all cryptocurrencies other than Bitcoin and Ether, there is less certainty about whether they would be viewed as securities under the applicable federal and state securities laws. However, on November 12, 2025, SEC Chairman Paul Atkins stated during a speech that it is his view that “most crypto tokens trading today are not themselves securities,” further specifying his view that, subject to certain qualifications, he does not believe certain “digital commodities,” “network tokens,” “digital collectibles,” or “digital tools” constitute securities and that he anticipates the Commission will consider establishing a clear token taxonomy in the coming months. However, such statement is not binding on the SEC or any court or other agency. Additionally, U.S. regulators have expressed concerns about cryptocurrency platforms adding multiple new coins, some of which they may view as unregistered securities. Additionally, the current presidential administration and control of Congress in the U.S. present considerable uncertainty as to cryptocurrency regulations and how regulators will apply the securities laws to cryptocurrencies and what changes Congress may enact with respect to cryptocurrencies. Although our policies and procedures are intended to enable us to make risk-based assessments regarding the likelihood that a particular cryptocurrency could be deemed a security under applicable laws, including federal securities laws, our assessments are not definitive legal determinations as to whether a particular digital asset is a security under such laws. Accordingly, regardless of our conclusions, we could be subject to legal or regulatory action in the event the SEC, a state regulator, or a court were to assert or determine that a cryptocurrency supported by our RHC or Bitstamp US platforms is a “security” under U.S. law.
For example, in June 2023, the SEC charged Binance and, separately, Coinbase with operating their respective cryptocurrency trading platforms as unregistered national securities exchanges, brokers, and clearing agencies, also alleging that certain cryptocurrencies supported on their respective platforms are securities. The charges also implicated Coinbase’s staking-as-a-service program and its non-custodial wallet. In November 2023, the SEC brought similar charges against Kraken, alleging that it operated as an unregistered securities exchange, brokerage and clearing agency. In February 2025, March 2025, and May 2025, each of Coinbase, Kraken, and Binance, respectively, entered into a court-approved joint stipulation with the SEC to dismiss each of the SEC’s lawsuits against such parties with prejudice. Several other digital assets market participants, including us, have also announced that the SEC informed them that the SEC was terminating its investigation or enforcement action into their firm. Also, in April 2025, the Office of the Deputy Attorney General issued a memorandum (the “April DOJ Memo”), setting out new enforcement priorities for digital asset-related investigations and prosecutions by the DOJ. The April DOJ Memo directed prosecutors not to “target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations”. The April DOJ Memo explained that the DOJ will instead prioritize cases against individuals who cause financial harm to digital asset investors and consumers and/or use digital assets in furtherance of other criminal conduct. The decisions by regulators not to bring enforcement actions provides, and any other action, settlement, or related investigation by regulators, might provide, additional guidance on the legal status of cryptocurrencies as securities more generally, which has affected and might significantly affect the actual or perceived regulatory status and value of cryptocurrencies we currently support or might support in the future. On January 21, 2025, the SEC announced that then-Acting Chairman Mark Uyeda “launched a
crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets.” The task force is focused on helping the SEC “draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.” The SEC formed the Crypto Task Force to provide clarity on the application of the federal securities laws to the crypto asset market and to recommend practical policy measures that aim to foster innovation and protect investors. Since formation, the Crypto Task Force has accepted written submissions on various cryptocurrency-related topics from industry participants; hosted roundtables on topics relating to security status, trading, custody, tokenization, DeFi, and financial surveillance and privacy; and has held meetings with interested stakeholders. On July 31, 2025, SEC Chairman Paul Atkins announced the launch of “Project Crypto,” described as “a Commission-wide initiative to modernize the securities rules and regulations to enable America’s financial markets to move on-chain.” In connection with this initiative, Chairman Atkins indicated that he has asked the Crypto Task Force to work on developing proposals to implement recommendations in the July 30, 2025, President’s Working Group on Digital Asset Markets Report, as well as a potential innovation exemption. While these developments are positive, the Crypto Task Force’s work remains in the early stages, and no formal rulemaking or exemptions have been proposed or adopted to date. In addition, notwithstanding recent positive developments involving the SEC, DOJ, and other federal regulators, state regulators retain independent authority to enforce their own securities laws, which may differ from or be interpreted more expansively than federal law. As a result, a state regulator could determine that a particular digital asset, product, or service constitutes a security under state law, even if the SEC has elected not to pursue enforcement action, the SEC has provided informal guidance or assurances to the contrary, or the asset, product, or service is otherwise excluded from the definition of a security at the federal level. Moreover, private litigants may assert claims under federal or state securities laws based on similar theories, regardless of the positions taken by federal regulators.
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registration, which could severely limit its liquidity, usability, and transactability. Moreover, the networks on which such supported cryptocurrencies are used might be required to be regulated as securities intermediaries, and subject to applicable rules, which could effectively render the network impracticable for its existing purposes. In addition, our growth might be adversely affected if we are not able to expand our RHC platform to include additional cryptocurrencies that the SEC has determined to be securities or that we believe are likely to be determined to be securities.
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In addition, in June 2025, we launched “Robinhood Stock Tokens” in certain jurisdictions in the EEA, which are designed to provide eligible customers in the EEA with exposure to certain U.S. exchange-listed stocks and ETPs. While we currently only offer Robinhood Stock Tokens in the EEA, because the assets underlying the tokens are certain U.S. stocks and ETPs, the SEC could assert jurisdiction over our Robinhood Stock Token offering and claim that transactions in our Robinhood Stock Tokens must be conducted in compliance with applicable federal laws and regulations. See “-Our introduction of Robinhood Stock Tokens in the EEA may expose us to significant regulatory, litigation, contractual, operational, and reputational risks” for more information.
If the SEC, a state regulator or a private litigant alleges that staking services we offer in the U.S. involve unregistered offers and sales of securities or unregistered securities broker-dealer activity in violation of the Securities Act, the Exchange Act or applicable state laws or regulations, and the courts agree with such plaintiff, we may be required to cease our staking activities and may be subject to monetary and other penalties.
In June 2025, we announced that RHC will be offering crypto staking services to eligible customers in certain jurisdictions in the U.S. In several enforcement actions filed by the SEC under the prior administration, the SEC alleged that certain companies had offered staking services to retail customers for various digital assets as unregistered securities or acted as unregistered securities broker-dealers in facilitating offers or sales of third-party staking services in violation of the registration provisions of the Securities Act or the Exchange Act. For example, as described under “-Risks Related to Cryptocurrency Products and Services-In the U.S., any particular cryptocurrency’s status as a “security” is subject to a high degree of uncertainty and if we have not properly characterized one or more cryptocurrencies, we might be subject to regulatory scrutiny, investigations, fines, and other penalties,” in 2023 the SEC charged Kraken, Coinbase and Binance with offering and selling digital asset staking-as-a-service programs to retail customers as unregistered investment contract schemes in violation of the Securities Act. In June 2024, the SEC charged Consensys Software Inc. with acting as an underwriter of unregistered securities in violation of the Securities Act and as an unregistered broker in violation of the Exchange Act by marketing the Lido and Rocket Pool third-party liquid staking-as-a-service programs to retail customers through Consensys’ “Metamask Staking” platform. As noted above, the litigation against Binance, Coinbase, and Kraken has been dismissed, and the SEC filed a stipulation to dismiss its lawsuit against Consensys with prejudice in March 2025.
We believe that our staking services do not offer or sell any “securities” subject to the securities laws or SEC regulations. We also believe that the structure, terms and other characteristics of the staking services offered by RHC generally align with those described in the Staff’s Statement on Certain Protocol Staking Activities issued in May 2025, wherein the Staff stated that it is the Staff’s view that the staking services of the nature described therein do not involve the offer and sale of “securities” within the meaning of the Securities Act and the Exchange Act. However, the Staff’s statement does not constitute a rule, regulation, guidance or statement of the SEC, and may be withdrawn at any time without notice and comment by the Staff or the SEC. Accordingly, we do not know if the SEC will agree with our interpretation of the applicable federal laws or regulations, or if we will be successful if we seek relief from the courts.
In addition, there is no guarantee that state regulators will agree with our interpretation of applicable state laws or regulations. For example, several state regulators have issued cease and desist orders to, or filed lawsuits against, Coinbase with respect to its staking services, alleging that Coinbase’s staking services constitute unregistered securities offerings under applicable state laws and regulations. While certain of the state regulators have since dismissed their lawsuits against Coinbase with respect to its staking services, not all state regulators have done so.
If the SEC, a state regulator or a private litigant were to prevail on claims that our staking services offered in the U.S. violate the Securities Act, Exchange Act or applicable state laws and regulations, we may be subject to monetary penalties, liabilities, reputational harm, and may be required to cease offering these services.
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The cryptocurrency accounting rules and regulations that we must comply with are complex and subject to interpretation by the FASB, the SEC, and various bodies formed to promulgate and interpret
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Bitstamp Europe S.A., Bitstamp Limited and Bitstamp Global Limited market crypto-asset lending services which are provided directly to customers by a third-party service provider. Customers lend their crypto-assets directly to a third party and the third party then on-lends to borrowers. Customer crypto-assets leave the custody of Bitstamp when customers access these services. There is a risk that borrowers may default on loans by the third-party service provider causing a financial loss to customers and in a worst case scenario the insolvency of the third-party service provider or its related group companies. Any of these risks could negatively impact our reputation, business, financial condition, and results of operations and discourage existing and future customers from utilizing our products and services.
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Our introduction of Robinhood Stock Tokens in the EEA may expose us to significant regulatory, litigation, contractual, operational, and reputational risks.
In June 2025, we launched Robinhood Stock Tokens for eligible customers in certain EEA jurisdictions. These products are designed to provide economic exposure to the price performance of certain U.S. stocks issued by publicly-listed U.S. companies and certain U.S. ETPs, without conveying legal ownership or shareholder rights, such as voting rights, related to such underlying stocks and ETPs. From time to time, we have offered, and may offer, token products that reference privately-held U.S. companies in connection with certain limited promotional initiatives in certain EEA jurisdictions (the “Private Company Stock Token Promotion”). Such tokens and Robinhood Stock Tokens do not represent, or entitle the holder to receive or convert into, actual securities of the referenced companies, and the value of the tokens is based on a defined reference price such as the market price of those securities or the price of those securities upon a liquidity event.
The cryptocurrency industry is rapidly evolving, and the tokenization of real-world assets is a nascent development in the industry. Accordingly, there remains considerable regulatory uncertainty regarding how transactions, products, services or offerings involving tokenized real-world assets, including tokenized financial instruments, are or should be regulated. While certain lawmakers, regulators and other public officials in the U.S. and in foreign jurisdictions have previously made statements or issued guidance relating to the legal and regulatory framework applicable to tokenized real-world assets, the legal and regulatory framework is still in the early stages, is continuing to evolve rapidly and remains uncertain and fragmented across jurisdictions. For example, in July 2025, SEC Commissioner Hester M. Peirce issued a statement noting that tokenized securities are still securities, and therefore transactions involving tokenized securities are subject to federal securities laws. Advisory committees and staff of the CFTC have also discussed exploring a potential regulatory framework for tokenization of assets, including tokenized collateral.
Regulatory approaches to tokenized real-world assets outside of the U.S. are similarly in the early stages and vary by jurisdiction. For example, in the EU, MiCA and MiFID operate as complementary regimes within the EU’s financial regulatory framework, with MiCA governing crypto-assets that do not qualify as financial instruments and MiFID continuing to apply to crypto-assets that meet the definition of financial instruments. Accordingly, the application of MiCA or MiFID depends on the characteristics of the specific tokenized real-world asset. In Singapore, the MAS has issued guidance stating that a crypto-
asset may constitute, among other things, a “share” where it confers or represents ownership interest in a corporation or a “securities-based derivatives contract” where the underlying asset is a share, debenture or unit in a business, which would require transactions in such crypto-assets to be conducted in compliance with applicable law and the applicable licenses.
We have offered Robinhood Stock Tokens and the Private Company Stock Token Promotion to eligible customers of RHEU in certain jurisdictions in the EEA and may offer similar tokens or promotions in the same or different jurisdictions in the future, and while we believe that such operations are, were, and will be in compliance with MiFID requirements applicable to derivatives (or other applicable requirements to the extent we offer similar tokens or promotions in different jurisdictions in the future), we cannot ensure that regulators would agree with our conclusions. For example, we have received requests for clarifications from the Bank of Lithuania, which has issued RHEU licenses under MiCA and MiFID, regarding our Robinhood Stock Tokens and the Private Company Stock Token Promotion in connection with the launch of that offering. Responding to such requests may divert management attention and require us to expend additional resources. If the Bank of Lithuania determines that our Robinhood Stock Token offering or the Private Company Stock Token Promotion is not being conducted in compliance with applicable laws or regulations, such determination could result in financial penalties or other non-monetary penalties, limitation of certain of our business activities (including with respect to our Robinhood Stock Token offering), loss or non-renewal of existing licenses or authorizations, increased scrutiny from other regulators, loss of our customers and reputational harm. In addition, any change in applicable laws or regulations, or change in interpretations of existing laws or regulations, could have a materially adverse impact on our ability to operate our Robinhood Stock Token offering as currently intended. In addition, because the assets underlying our Robinhood Stock Tokens and the Private Company Stock Token Promotion are certain U.S. securities, the SEC or other U.S. regulators, including the CFTC, could assert jurisdiction over our Robinhood Stock Token offering or the Private Company Stock Token Promotion and claim that transactions in related tokens must be conducted in compliance with applicable U.S. laws and regulations. Such a determination could result in lawsuits, regulatory action and enforcement proceedings that result in injunctions, fines, penalties and other monetary damages, and could require us to obtain additional registrations or licenses in the future and cause us to incur significant expenses in order to ensure compliance with applicable laws and regulations.
We may also face contractual or legal challenges from the issuers of the referenced securities. Some companies, particularly private companies with transfer restrictions, may object to the creation of synthetic instruments such as tokens which reference the companies’ securities and are facilitated by Robinhood or one of its affiliates holding an interest in a SPV that holds the referenced securities or instruments representing a contingent interest in the referenced securities. In such cases, the issuer may assert that our interest in the SPV is invalid, void or otherwise unenforceable, or that we have violated or induced or assisted in the violation of, applicable transfer restrictions, which could result in a loss or impairment of the SPV’s rights to the underlying securities, which could in turn prevent us from effectively hedging our exposure to the associated tokens held by our customers. For example, OpenAI has publicly stated that OpenAI tokens issued in connection with the Private Company Stock Token Promotion are not OpenAI equity, that they did not partner with us and did not endorse the OpenAI tokens, and that any transfer of OpenAI equity requires OpenAI’s approval and OpenAI did not approve such transfer. Accordingly, Robinhood or our affiliates may be exposed to risks relating to litigation, reputational harm, or the need to suspend or revise affected offerings.
The Robinhood Stock Token offering and the Private Company Stock Token Promotion also involved, and could involve, operational risks, in addition to existing cryptocurrency risks. They have relied on, and could rely on, accurate and timely price data, functioning systems for custody and valuation, and clear communication to customers about how the tokens work. If these systems fail, or if customers misunderstand that the tokens don’t represent actual securities, we could face regulatory action, legal exposure, or reputational harm.
If we are unable to adequately manage these risks, or if regulators, issuers, or other counterparties take adverse action, our Robinhood Stock Token or similar initiatives in the future could be curtailed or terminated, which could adversely affect our crypto and international business operations, expose us to significant liability and harm our brand.
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seek to monetize the intellectual property rights they own to extract value through licensing or other settlements.
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