KBW Analyst: Robinhood may win in the cryptocurrency legal battle with the SEC

ChainCatcher news, according to CoinDesk, broker KBW stated in a research report on Monday that it is surprising that the U.S. SEC issued a Wells notice to Robinhood (HOOD) given the company's very conservative approach to launching digital assets. KBW pointed out that Robinhood only offers 15 cryptocurrencies on its U.S. platform, while some peers offer over 200 digital assets.

Analysts led by Kyle Voigt wrote: "We expect that Robinhood's current crypto business or asset listings in the U.S. will not change, and we anticipate that the U.S. Securities and Exchange Commission will file a lawsuit in the coming months. Our initial view is that Robinhood may fight the U.S. SEC in court, and considering Robinhood's stricter listing standards, its chances of winning are higher than most U.S. competitors (if in a similar situation)."

The report stated that crypto trading accounts for 12% of Robinhood's revenue, and KBW believes the SEC may investigate a portion of the digital assets on the platform, adding: "From a risk revenue perspective, the worst-case scenario is if the SEC chooses to classify ETH as a security, as this could account for about 25% of Robinhood's crypto assets/trading."