The cryptocurrency market had a strong start in 2023, with most assets experiencing a significant increase in their valuation compared to the end of 2022. This was reflected in Robinhood’s crypto trading volume, which hit $3.7 billion in January, a 95% increase from December of the previous year. However, this figure still stands far below the $9.1 billion recorded in January 2022. The company’s daily average revenue trades (DARTs) involving digital currencies also increased from 200,000 in December 2022 to 300,000 in January 2023.
Unfortunately, the tumultuous 2022 had a negative impact on Robinhood’s crypto revenue and overall trading activities. Its net revenue decreased by 43% in the first quarter of the year, while crypto trading dropped by 40%. In addition, the New York State Department of Financial Services (NYDFS) fined the company $30 million in August for violating anti-money laundering and cybersecurity procedures.
As a result, Robinhood had to lay off a significant portion of its workforce, with 9% of employees being let go in April and 23% in the following months. Most of the affected staff were from the operations, marketing, and program management divisions. CEO Vlad Tenev attributed the layoffs to the spiking inflation in the US and promised that departing employees would receive regular pay and benefits, cash severance, and dental and vision insurance premiums.