SecProbe.io

United States securities and exchange commission logo
February 1, 2024
Vladimir Tenev
Chief Executive Officer
Robinhood Markets, Inc.
85 Willow Rd
Menlo Park, CA 94025
Re:Robinhood Markets, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2022
Form 10-Q for the Quarterly Period Ended September 30, 2023
File No. 001-40691
Dear Vladimir Tenev:
            We have reviewed your October 19, 2023 response to our comment letter and have the
following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments. Unless
we note otherwise, any references to prior comments are to comments in our September 21, 2023
letter.
Form 10-K for the Fiscal Year Ended December 31, 2022
Robinhood Crypto, page 7
1.We note your response to comment 2 and reissue the comment in part. Please provide a
materially complete description of custodial solutions in future filings.
•Describe the geographic location of the facilities where the crypto assets are held in
cold wallets. Additionally, describe the security precautions you take in controlling
access to crypto assets you custody in cold wallets. Your disclosure need not identify
specific places or individuals but should provide investors a sufficient basis to assess
the potential risks associated with your custodial services;
•Disclose the crypto asset, custody, transfer, and settlement operations managed by
your third-party provider and describe the technology used by the vendor. In your
revisions to disclosure related to your third-party vendor, describe the industry
standard for maintaining private keys and any deviations thereto in your agreement

 FirstName LastNameVladimir  Tenev
 Comapany NameRobinhood Markets, Inc.
 February 1, 2024 Page 2
 FirstName LastNameVladimir  Tenev
Robinhood Markets, Inc.
February 1, 2024
Page 2
with the vendor;
•If true, disclose that only your internal audit and compliance teams are responsible
for verifying the Company’s crypto asset holdings and that no independent entity,
including your auditor or insurance provider, has the right or responsibility to inspect
or otherwise verify the accuracy or existence of the crypto assets you custody;
•Describe how the omnibus wallets function, how records of customer accounts are
maintained and how disputes among customers to the assets in the wallets are
resolved. Refer to your disclosure on the top of page 116 that "[b]ased on the terms of
[y]our user agreement and applicable law, [you] believe the cryptocurrency
[you] hold in custody for users of [y]our platform...should not be available to satisfy
the claims of [y]our general creditors." Disclose whether you have obtained an
opinion from counsel in this regard and include related risk factor disclosure; and
•Describe any circumstances where a customer's crypto assets may be comingled in a
hot or cold wallet with the crypto assets of another customer, of yours or of any other
party.
Item 1A. Risk Factors, page 19
2.We note your response to comment 12. Please disclose how your Enterprise Risk
Committee and management assess the Company’s risk profile and identify and analyze
material risks with respect to Robinhood Crypto's business and describe any changes you
have taken to address identified risks, gaps or weaknesses.
The loss, destruction or unauthorized use or access of a private key..., page 48
3.We note your response to comment 14 and reissue in part.  Please revise to quantify your
insurance coverage in order to provide appropriate context for the disclosure that your
insurance coverage for such events is limited and might not cover the extent of loss.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Key Factors Driving Our Performance, page 76
4.We acknowledge your response to comment 5. Please confirm for us that all your users
pay you fees. In this regard, it is clear from disclosure on page 8 that Robinhood Gold
users pay you a flat monthly rate but from disclosure on pages 84 and 74, Robinhood Gold
users in 2022 were only 1.1 million of your 23.0 million net cumulative funded accounts
and 11.4 million monthly active users. If so, represent to us that you will revise your
disclosure of users of your products in your Business section of future filings to clarify
that all users pay fees and describe those fees. If not, tell us the number of users in each of
the periods presented in your Form 10-K and latest Form 10-Q that pay you fees or other
consideration versus those users that do not pay fees and explain to us why the number of
users who pay no consideration and are not customers under ASC 606 does not necessitate
the disclosure previously identified on pages 1 and 126 of your initial public offering
prospectus.

 FirstName LastNameVladimir  Tenev
 Comapany NameRobinhood Markets, Inc.
 February 1, 2024 Page 3
 FirstName LastNameVladimir  Tenev
Robinhood Markets, Inc.
February 1, 2024
Page 3
Comparison of the Years Ended December 31, 2022 and 2021
Revenues
Net Interest Revenues, page 82
5.We acknowledge your response to comment 6. As indicated in our previous comment,
simple averages assume straight-line increases or decreases in balances which rarely
occurs. It is evident from your filings and response that the yields based on simple average
can be significantly different than the yields presented on the more granular averages of
month-end and quarter-end balances. As a result, please represent to us that in future
Forms 10-K and 10-Q, you will calculate the average balances (and thus yields) based on
the month-end balances in the relevant periods presented in those filings and revise the
equivalent of footnote 4 to your yield table to clarify that the average balances are based
on month-end balances. We note that month-end balances are readily available without
unwarranted or undue burden or expense.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk, page 94
6.We acknowledge your response to comment 7. Please address the following additional
comments:
•It is unclear from your proposed revised disclosure how a hypothetical 100 basis
point change in market interest rates applied to only your period end balances could
have a 10% impact at December 31, 2022 on total net revenues, income and cash
flows "over the prior annual period." Tell us, in the context of your proposed revised
disclosure at December 31, 2022:oWhether the "prior annual period" refers to the year 2022 or 2021;
oHow a unilateral change at a point in time (i.e., December 31, 2022) can have an
impact on historical total net revenues, income and cash flows, accounts that
reflect activity over time;
oWhether your 10% impact in 2022 relates to a hypothetical unilateral 100 basis
point change in interest rates over the entire year of 2022; and
oWhether you are projecting 2023 activity based on December 31, 2022 balances
at the 100 basis point hypothetically changed rate and comparing those future
2023 results to those in 2022.
•Explain to us how any hypothetical 10% change in total net revenues can also have a
10% change on both income (presumably net income) and cash flows (presumably
operating cash flows) if the starting point is different. For example, using information
for the year ended December 31, 2022, a 10% increase in total net revenues of $1,358
million would be about $136 million. Such an increase in total net revenues would
represent about 13.2% of reported net loss of $1,028 million and about 16.0% of
reported net cash used in operating activities of $852 million. In your response, tell us
whether there are incremental expenses (like perhaps income taxes) that impact
income and cash flows and, if so, identify and quantify those expenses for us.

 FirstName LastNameVladimir  Tenev
 Comapany NameRobinhood Markets, Inc.
 February 1, 2024 Page 4
 FirstName LastName
Vladimir  Tenev
Robinhood Markets, Inc.
February 1, 2024
Page 4
•Further, tell us how your response aligns with your net interest revenue activity and
year-over-year changes as disclosed on page 83 of your 2022 10-K and your response
to prior comment 6. Refer to Item 305(a)(1)(ii) and (a)(3) of Regulation S-K.
Notes to the Consolidated Financial Statements
Note 1: Description of Business and Summary of Significant Accounting Policies
Segment Information, page 109
7.We acknowledge your response to comment 8. Please represent to us that in future filings,
you will revise your disclosure here or elsewhere, as appropriate, to:
•Describe the process you are undertaking to restructure to a general manager business
unit structure;
•Indicate that you currently have only a single operating segment because your chief
operating decision maker (CODM) currently reviews only consolidated information
to allocate resources and assess performance; and
•The potential impact on segment reporting of finalized financial reporting for each
business unit and related reporting to the CODM.
Legal and Regulatory Matters, page 145
8.We note your response to comment 11 and reissue the comment.  To the extent a specific
amount of damages is sought from the Company, please revise to quantify that amount in
your disclosure.  Refer to Item 103(a) of Regulation S-K.
            Please contact Mark Brunhofer at 202-551-3638 or Michelle Miller at 202-551-3368 if
you have questions regarding comments on the financial statements and related matters. Please
contact David Gessert at 202-551-2326 or Sandra Hunter Berkheimer at 202-551-3758 with any
other questions.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets
cc:       John Markle