Is Robinhood’s crypto push bound to fail?

Reporting by Business Insider exposed a woefully delayed pivot to crypto trading by Robinhood. An overly cautious legal team and leadership churn further contributed to the slow pace.

Why should we care?
Robinhood is grappling with a problem that’s equal parts regulatory and cultural. On the one hand, Robinhood has a harder time “moving fast and breaking things” because it has over 22 million users that interact with its crypto products. And Robinhood is a regulated broker-dealer, which further ups the stakes for the trading platform. "The bigger you get, the slower you move,” an anonymous insider told Insider. “The frustration of not being able to move fast enough is common across fintech." Robinhood hired Dan Gallagher, a former commissioner of the SEC, as its Chief Legal Affairs and Corporate Officer in May 2020. He’s bearish on crypto and has been particularly reluctant to roll out crypto products at hyperspeed. While that’s good for the company’s liability prospects, it can also convince potential users to use alternative platforms like OpenSea or Coinbase. "We are focused on providing a safe and dependable crypto platform for our customers, something we are uniquely situated to do given that we operate in highly regulated markets and have the best regulatory talent in the country,” Robinhood said in a statement. “This distinguishes us from the many crypto platforms that may not be accustomed to operating in a regulated environment." This may work in Robinhood’s favor in the long run, helping it avoid coins more prone to collapse than others, and therefore avoid even more user alienation. But, as the crypto winter further freezes and cryptocurrencies collapse across the board, a push into crypto appears less promising—whether done quickly or slowly doesn’t matter.