Trading platform Robinhood has re-listed Solana (SOL) at over $216 a year after it removed the crypto and sold any remaining coins for just $16.

Multiple users on X (formerly Twitter) slated today’s re-listing, which came as Cardano (ADA), PEPE, and XRP were also added to the platform.

“Will never forgive Robinhood for de-listing SOL at $16,” one user said, while crypto sleuth ZachXBT claimed that Robinhood forced its users to sell their coins, causing “massive losses.”

He asked, “What changes will Robinhood be making to regain trust so users are not forced to exit positions again in the future?” 

Read more: How Jump helped US Robinhood users trade offshore at FTX

Robinhood de-listed SOL, ADA and MATIC

On June 7 last year, Robinhood warned it would de-list SOL, ADA, and Polygon (MATIC) from its exchange by June 27. Users were allowed to buy, sell, hold, and transfer any of these three cryptocurrencies up until the deadline. 

After this, “any ADA, MATIC, and SOL still in your Robinhood Crypto account will be sold for market value and the proceeds will be credited to your Robinhood buying power.” It’s worth noting that users living in New York weren’t allowed to transfer their SOL.

ADA was worth roughly $0.28 at the time while SOL was worth just over $16. Today, ADA is worth almost $0.6 (a 114% increase) and SOL is worth over $216 (a 1,250% increase).

Read more: CHART: It’s been 262 days since Solana’s last major outage

At the time, Robinhood claimed it had reviewed its crypto offering before the de-listing. Reports noted that these tokens were identified as securities in a Securities and Exchange Commission lawsuit accusing Binance and Coinbase of offering unregistered securities.

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Michael Lewis’ new book Going Infinite revealed that Jump Trading is one of the largest losers in the FTX collapse, apparently giving up almost $300 million. Among the Jump-related entities mentioned is Tai Mo Shan Limited, which used to be one of Robinhood’s largest market makers.

In the second quarter of 2021, 29% of its total revenue came from transactions with Tai Mo Shan. 

In its role at Robinhood, Tai Mo Shan was one of the market makers responsible for fulfilling user cryptocurrency trades. Robinhood would direct user orders to Jump Trading, which would then supply the required cryptocurrency or money, and Coinbase Custody was responsible for providing custody services to Robinhood.

Tai Mo Shan, as well as Jump, was deeply entangled with FTX, losing hundreds of millions of dollars in the collapse of the exchange. 

The relationship between Jump and Robinhood appears to have ended in 2022. 

Read more: Telegram chats by Jane Street and Jump Crypto staff probed in Terra case

Also in 2022, Jump had to spend hundreds of millions of dollars in order to bail out the Wormhole cryptocurrency bridge, which had been hacked.  

Jump currently faces a lawsuit that alleges that it manipulated the Luna and Terra markets. Documents revealed as part of the Securities and Exchange Commission’s (SEC) lawsuit against Terraform Labs detail how Tai Mo Shan received a large loan of Luna from Terraform starting in 2019. As part of the agreement, Jump agreed to “improve liquidity of Terra.”

The SEC complaint seems to reveal that Jump made approximately $1.28 billion from selling the Luna acquired from Terraform Labs. Currently, the SEC lawsuit does not allege wrongdoing by Jump or its subsidiaries.

Reportedly, Jump has reduced its cryptocurrency activities in light of increased regulatory scrutiny.

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Robinhood quickly made waves after launching in 2013 by offering free shares in companies for new customers and gamifying complicated options contracts. In 2020 and 2021, covid restrictions and US government checks to citizens created the perfect climate for the broker, with gambling on stock markets rising in simplicity and popularity. Streamers, TikTokers, and YouTubers went full “not financial advice” on their audiences.

Ever since February of last year, however, it’s become abundantly clear that Robinhood picked the wrong time to go public — and the broker is struggling.

The lifting of covid restrictions meant that fewer people were sitting on their phones at home and gambling this past year. It turns out that this is bad for apps like Robinhood, that want you to gamble on the stock market.

Additionally, Robinhood is now contending with rising interest rates and a US economy constantly flirting with a recession — and we haven’t even gotten to Sam Bankman-Fried’s (SBF) purchase yet.

SBF stakes 7.6% of Robinhood

The more than 55 million shares of Robinhood stock that SBF and Gary Wang purchased in May under a company called Emergent Fidelity Technologies benefitted Robinhood immensely at the time: shares for the company were trading at or near all-time lows when the announcement was made and soared almost 30% by market open the next day.

Read more: Jump Crypto ties to FTX and Solana put Robinhood users at risk

But trouble wasn’t over for the newly public company. Robinhood was fined $30 million by the New York State Department of Financial Services (NYDFS) for significant violations of anti-money laundering (AML) practices. The firm ended up laying off a large portion of its staff over the course of 2022.

By June, Robinhood stock price was below $7.

Are Robinhood’s troubles in the rear-view mirror?

In January, the Department of Justice finally made the decision to seize SBF’s Robinhood shares after criminally charging the FTX founder with a multitude of financial crimes. What will happen with the shares is unknown.

Meanwhile, Robinhood has been trying to tamp down investor fears about the half a billion dollars worth of stock that could hit the markets if the Department of Justice (DoJ) or FTX and Alameda liquidators manage to claim the rights to the shares.

After a disappointing Q4 of 2022 the board has agreed to a hypothetical re-purchase of the SBF-tainted shares, but there’s one snag: they have no idea if the DoJ or liquidators will agree to the offer.

For what its worth, Sam’s choice to go long on Robinhood in May could well be his only good trading decision. The company hasn’t really lost much value since the purchase and the shares are actually liquid, unlike the hundreds of cryptocurrencies and other venture investments in his portfolio.

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Investors in the investing app Robinhood fear that contagion from FTX could affect their trades being processed by Jump Crypto. The link between Robinhood, Jump, and FTX is direct: Sam Bankman-Fried (SBF) notably owned 7.6% of Robinhood’s stock and once claimed to be preparing a full acquisition offer for Robinhood.

Institutional investors are selling first and asking questions later. Already, Catherine Wood’s Ark ETF Trust (NYSE:ARKK) has disclosed $10 million dollars worth of Robinhood share sales in favor of $21 million purchases of Coinbase shares, according to ARKK’s latest SEC filing.

Analysts at JP Morgan also downgraded Robinhood from Neutral to Underweight and reduced its price target by 11% on November 3. The day prior, Robinhood disclosed that it lost 1.8 million customers from the second to third fiscal quarter of 2022, and its quarterly revenue missed Wall Street expectations by $11 million.

Robinhood advertises so-called “commission free” stock and digital asset trades. It accomplished that feat by selling order flow to quantitative trading shops like Citadel and Jump Crypto.

Chicago’s quantitative trading giant Jump Trading has provided (expensive) execution services for Robinhood’s digital asset orders. In 2015, Jump formed Jump Crypto, a subsidiary focused on developing advanced digital asset-related technologies, including low-latency proof generation for Zero Knowledge (ZK) proofs.

Jump Crypto supported FTX, LUNA, and Solana before Robinhood

Jump and SBF’s crypto exchange FTX, as well as his crypto trading firm Alameda Research, were consistent cheerleaders of Solana (SOL). SOL is trading 94% below its all-time high.

SBF worked alongside Jump to organize a bailout of the prominent Solana-Ethereum blockchain bridge, Wormhole, that protected the value of Solana’s ecosystem.

Jump Crypto had been supporting Solana even before then. As the parent company of the cross-chain bridge Wormhole, it jumped in to rescue it from a February 2022 exploit that stole $320 million in assets. It replaced a staggering 120,000 stolen Ethereum (ETH).

Read more: Jump Crypto forced to save Solana with $320M bailout of its own company

Solana tapped Jump Crypto to create a second validator and increase its network thoroughput. That effort became “Firedancer,” which Jump Crypto anticipated would take about two full years to complete.

With enough ETH to bail out Wormhole after such a massive exploit, one could assume that Jump Crypto is sitting on a pile of digital assets. However, where would it have come across $320 million in ETH at a time when it was making bets on other assets that might have been ill-advised? Unnconfirmed rumors are now circulating that it could have secretly dipped into Robinhood customer assets.

In May 2019, Bloomberg journalists received a scoop that Robinhood was using Jump Trading to fill orders for digital assets. Since then, Jump Crypto had time to view vast numbers of orders by Robinhood traders.

As the FTX and Celsius fall-out have revealed, crypto custody providers and order routing services sometimes dip into their customer assets inappropriately. Sometimes, nefarious executives use order flow or traders’ holdings for their own benefit or to bail out another subsidiary, without disclosing their actions for days or weeks.

Read more: Celsius manipulated CEL token to bolster balance sheet, filing says

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Update 17:10 UTC, Nov 18: Since publication, Robinhood has posted a comprehensive Twitter thread addressing a number of issues discussed in the article, namely lending and leveraging using customers’ crypto assets, the firm’s risk controls, and storage of its crypto.

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Investors in crypto app Ziglu are braced for heavy losses after investment platform Robinhood dropped its valuation of the UK-based company by nearly 60%.

Robinhood agreed to buy Ziglu for $170 million back in April but now, due to a “shift in market conditions” and citing recent failures, including Celsius, Voyager, and BlockFi, the Menlo Park firm has slashed its offer to just $72.5 million.

This translates to a share price of $34.04, a significant drop from the $58.12 reached during Ziglu’s last funding round in November last year.

According to Ziglu founder Mark Hipperson, if Robinhood does indeed pull out of the previously-agreed deal, the company would be left facing an “extremely challenging market, and undercapitalized for the period ahead,” (our emphasis).

“The board has spent significant time in discussion with Robinhood’s CEO and executive team negotiating and improving the terms of their revised offer,” said Hipperson (via AltFi).

“Based on these discussions and other considerations, we believe the revised proposal…is the best and only reasonable path forward for the company.”

Robinhood’s Ziglu deal isn’t the only one to hit the skids

Robinhood’s Ziglu deal isn’t the only high-profile takeover to have stalled in recent weeks.

Earlier this month, Mike Novogratz’s Galaxy Digital pulled out of a $1.2 billion deal to buy crypto custody firm BitGo. Galaxy claimed BitGo had failed to produce the required financial paperwork.

However, BitGo doesn’t plan to take the snub lying down and says it will seek a $100 million “breakup fee” from Galaxy by way of compensation.

Read more: Galaxy Digital buys BitGo in $1.2B deal, Bitcoin’s biggest ever

“The attempt by Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd,” BitGo’s lawyer said in a press release.

“BitGo has honored its obligations thus far, including the delivery of its audited financials. It is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and Mr. Novogratz have been distracted by the Luna fiasco. (our emphasis).

“Either Galaxy owes BitGo a $100 million termination fee as promised or it has been acting in bad faith and faces damages of that much or more.”

Galaxy told CoinDesk that these claims are unfounded and that it will defend itself “vigorously.”

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The crypto arm of trading and investment app Robinhood (RHC) has been fined $30 million by New York authorities after it failed to properly invest in its workforce, processes, and resources, leading to “significant violations of anti-money laundering and cybersecurity regulations.”

According to a press release issued by the New York State Department of Financial Services, RHC’s compliance program was inadequately staffed, the company was too slow in moving away from a manual transaction monitoring system, and it didn’t do enough to address risks identified by the regulator.

All of this added up to severe breaches of the Bank Secrecy Act and anti-money-laundering rules.

As stated in the department’s consent order: “RHC did not timely transition its manual system to an automated transaction monitoring system, which was unacceptable for a program that, as of September 30, 2019, averaged 106,000 transactions daily, totaling $5.3 million,” (our emphasis).

The order also details how in late 2019, an outside consultant working with RHC described its manual AML processes as having “minimal value.” Despite this warning, RHC didn’t roll out its automated system until April 2021.

Among the other shortcomings or issues highlighted by the department’s investigation were an abnormally high $250,000 threshold before unusual transactions were reported, inadequate escalation processes for tackling suspicious activity, and an overreliance on outside agencies when it came to cybersecurity.

The consent order also called into question RHC’s entire compliance culture. According to investigators, the company was not only overly reliant on its parent company’s compliance framework (which was also not in line with state regulations), its Chief Compliance Officer (CCO) reported to RHC’s director of product operations instead of a legal or compliance executive.

This, according to regulators, meant the CCO “played no meaningful role in compliance efforts at the entity level.”

Finally, the regulator criticized RHC’s overall approach to working with it, stating that cooperation levels were “less than what is expected of a licensee that enjoys the privilege of conducting business in the State of New York.”

The report specifically cited delayed or insufficient information and multiple failures to disclose investigations of RHC affiliates.

In addition to paying the $30 million fine, RHC must also enlist an independent consultant to monitor compliance going forward.

It’s not Robinhood’s biggest fine

The hefty punishment is by no means the first financial penalty handed down to Robinhood.

In June last year, the app was ordered to pay around $70 million in penalties by the Financial Industry Regulatory Authority (FINRA) following widespread system outages and what it called “misleading communication and trading practices.”

Read more: New York crypto firms will soon pay for their own regulation, just like banks

The authority said that Robinhood gave users false information on issues including whether they could place trades on margin, how much cash was in their accounts, buying power or “negative buying power,” the risks they faced in certain options transactions, and whether they faced margin calls.

Tragically, one Robinhood customer who had turned margin “off,” took his own life in June 2020. In a note, he said he was confused about how he could have used margin to purchase securities.

Thousands of other Robinhood customers lost somewhere in the region of $7 million due to the company’s misleading statements.

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California-headquartered crypto exchange Robinhood is making another assault on the UK and European markets with the purchase of London-based trading app Ziglu, reports CNBC.

Ziglu allows users to trade 11 different cryptos and earn interest on their Bitcoin. According to Robinhood, it will help to accelerate its “international expansion, both in the UK and across Europe.”

The exact terms of the deal are still under wraps. However, as of September last year, the platform, which was founded in 2014, had a value of somewhere in the region of £85 million ($111 million).

Speaking after the announcement, Ziglu founder and CEO Mark Hipperson said:

“Ziglu and Robinhood share a common set of goals, working to reduce the barriers to entry for a new generation of investors, and we’re excited to pursue that mission together.”

“As part of Robinhood, we’ll supercharge Robinhood’s expansion across Europe and bring better access to crypto and its benefits to millions more customers.”

Robinhood gained a Financial Conduct Authority (FCA) license back in 2019 but shelved plans to move into the UK after one of its users committed suicide. The man wrongly believed he lost more than $700,000 using the app.

At the time, Robinhood said it was investing in its foundational systems and working to strengthen its core US business.

However, Ziglu was more than happy to hoover up any frustrated traders on Robinhood’s waiting list.

Buying FCA accreditation could be easier than gaining it yourself 

The buyout could bring with it an added bonus for the California-headquartered trading giant. Namely, an oven-ready accreditation from the FCA with regards to UK money laundering laws.

Since January 2020, any organization wanting to provide specific crypto-related services or products in the UK has needed to comply fully with the FCA’s money laundering regulations (MLRs).

Robinhood’s original FCA license didn’t include this accreditation. However, Ziglu is currently one of only 34 crypto companies in the UK to get an okay from the watchdog.

The FCA’s accreditation process is notoriously difficult for firms to navigate. Many withdrew applications because they could or would not meet the required money laundering standards.

Indeed, last month, an FCA spokesperson told CNBC that over 80% of companies had withdrawn their applications or been turned down.

Read more: Robinhood trader sues over ‘false and misleading’ docs padded with crypto

“We’ve seen a high number of the cryptoasset businesses applying for registration not meeting standards there to help ensure firms are not used to transfer and or disguise criminal funds,” the FCA spokesperson said.

“Firms that do not meet the expected benchmark can withdraw their application. Firms that decide not to withdraw have the right to appeal our decision to refuse, including through the courts.”

One of the most recent high-profile victims of the FCA’s strict, no-nonsense approach is crypto firm Copper Technologies.

The company was unable to close a $500 million funding round earlier this month due in part to uncertainty around the company still being on the FCA’s temporary accreditation list.

Companies on the list can continue to trade pending the outcome of their full application.

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Out now: the first four episodes of our ongoing investigative podcast series Innovated: Blockchain City.

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Crypto-forward brokerage Robinhood’s initial public offering (IPO) opened trade at $38 per share last July. Today, its stock is worth only $13 — having collapsed more than 60% since its debut.

According to a new lawsuit brought by investor Robert Zito, Robinhood allegedly released “false and misleading” IPO documents, reports Law360.

Plaintiff Zito alleges Robinhood padded its numbers with temporary crypto-related transaction volume.

Robinhood’s brief spike in cryptocurrency trading volume, he claims, obscured a downturn in overall revenue. The company previously disclosed that Dogecoin made up 62% of its overall revenue in last year’s second quarter.

The Menlo Park-headquartered unit raised $2 billion in its IPO. Co-founders Vlad Tenev and Baiju Bhatt picked up $50 million each from selling stock personally.

Investment banks Goldman Sachs and JPMorgan Chase led the IPO and collected generous fees.

But things went south from there. Robinhood fetched a $32-billion valuation on its first day of trade, now it’s worth less than $12 billion.

Indeed, common shareholders — despite Robinhood’s namesake — surrendered their money to Wall Street insiders yet again.

Zito is reportedly seeking damages from Robinhood execs, as well as a court order demanding the firm rectify its corporate governance and other internal procedures, noted Law360.

Robinhood collateral damage in meme trader mania

Although Robinhood reported a profitable fiscal 2020, the company lost $1.4 billion in the first quarter of 2021 alone.

Last year’s first quarter was noteworthy: it was when Reddit posters caused mayhem by squeezing meme stocks for thousands of percentage points.

At their zeniths, Robinhood forced trading freezes on GameStop (GME) and AMC stock across its trading app.

• These trading suspensions sparked considerable controversy, including accusations that Robinhood was protecting institutional traders at the expense of retail investors.
• Investors sued the company, alleging that Robinhood deprived them of profits by “purposefully, wilfully, and knowingly” removing GME stock from its platform.
• Despite 309% higher revenue in Q1 2021 versus the same quarter in 2020, Robinhood’s poor reaction to the Reddit short squeezes has eliminated profitability altogether.

Read more: [Robinhood won’t follow Coinbase and buy crypto with company cash — yet]

Robinhood is currently beta testing crypto wallets for its users, which finally allows them to withdraw digital assets from its trading platform.

The digital asset community has reiterated concerns that users would not have any control over their crypto if Robinhood again freezes its platform.

In any case, while Zito’s lawsuit plays out, a number of other legal firms are circling for spurned Robinhood users — hoping to get a cut of a potential class action win.

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Robinhood won’t be buying crypto with company cash any time soon, and it won’t be adding to its stable of tradable assets, either.

The Menlo Park-trading firm currently lists just seven cryptocurrencies, including Bitcoin, Litecoin, Ether, and Dogecoin.

“It’s not lost on us that our customers and others would like to see us add more coins,” said Robinhood finance chief Jason Warnick at the Wall Street Journal’s virtual CFO Network Summit this week (via Fox Business).

“We’re a highly regulated company in a highly regulated industry, and we think it’s important that we get a bit more clarity from regulators.”

Warnick’s comments came when he was asked if Robinhood planned to list meme token Shiba Inu.

Robinhood has ‘no reason’ to put its own cash into crypto

Last August, top US crypto exchange Coinbase achieved board approval to add up to $500 million worth of crypto to its balance sheet. 

Coinbase chief exec Brian Armstrong also pledged to invest 10% of company profits into digital assets moving forward.

But apparently, Robinhood has no plans to give in to public demand and follow Armstrong’s lead.

[Read more: Robinhood share price and revenues tank as Dogecoin popularity wanes]

“There aren’t compelling reasons strategically for our business to put any meaningful amount of our corporate cash into cryptocurrencies,” said Warnick.

Regardless, it’s not clear whether Robinhood posts enough consistent profit to even consider adding crypto to its balance sheet.

Robinhood operated at a net loss of $2.1 billion in Q3 last year, while Coinbase reported $406 in non-GAAP profit.

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