Editing Robinhood Markets, Inc. (section)

=== (A) Regulatory risk ===

* PFOF: A material part of retail broker economics stems from payment-for-order-flow arrangements (retail trades routed to market-makers for payment). Regulators (both in the U.S. and abroad) are scrutinizing PFOF for potential conflicts of interest or sub-optimal execution for clients. If PFOF is restricted or banned, the business model could be materially weakened.
* Brokerage & crypto regulation: As Robinhood grows in derivatives, futures, tokenized assets and crypto, regulatory oversight intensifies (SEC, CFTC, FINRA, EU regulators). Fines, enforcement actions or licensing issues could hit profitability or require increased spending. For example, earlier issues with outages, claims of misleading marketing, and state/SEC/FINRA enforcement have affected the company in the past.
* International regulatory expansion: Moving into 30 European countries and acquiring crypto exchange licenses (Bitstamp) means regulatory risk multiplies (compliance, local laws, licensing, consumer protection).