Trading platform Robinhood announced the release of a beta version of its web3 wallet. The wallet will be available to 10,000 test users before being released to the public in May.

Why should we care?
Robinhood is looking to mimic the same initial success it had as a stock trading platform by letting users buy crypto without trading fees. Competing with established players in the crypto space like Coinbase, Robinhood hopes to eat into both incumbents’ and other challengers’ user bases—and, potentially, turn its valuation around. With its stock hovering around 20% of its record value, Robinhood needs new markets and greater engagement to buoy investor sentiments. But, even if the company sees its web3 offerings take off, Robinhood’s compliance team will probably have to sleep with one eye open: The company suggests its web3 wallet will also let users purchase yield products through the decentralized apps that tap into the wallet. Robinhood merely operates infrastructure to purchase those kinds of products, rather than selling them directly, but the SEC’s $100 million penalty against BlockFi for offering those same products should cause worry. Duplicating its launch strategy in a new sector, Robinhood may also be landing itself in the same hot legal waters it’s been in before.