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Document

March 1, 2024

VIA EDGAR

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Attention:    Mark Brunhofer

        David Gessert

Sandra Hunter Berkheimer

Michelle Miller

Office of Crypto Assets

RE:    Robinhood Markets, Inc.

Form 10-K filed February 27, 2023

Form 10-Q filed August 3, 2023

File No. 001-40691

Ladies and Gentlemen:

Robinhood Markets, Inc. (the “Company,” “Robinhood,” “RHM,” “we,” or “our”) hereby submits via EDGAR the Company’s responses to comments received from the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) set forth in the Staff’s letter to the Company, dated February 1, 2024, in relation to the above-referenced filings and our prior response letter dated October 19, 2023 (the “Prior Response Letter”).

We have set forth below each of your comments followed by the Company’s response.

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 with the vendor;

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•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.

Response:

The Company acknowledges the Staff’s comment and has set forth below each item followed by the Company’s response.

•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.

The Company respectfully advises the Staff that with respect to cryptocurrency coins on its platform held in cold storage, such cold storage facilities are located in the United States with physical security systems that the Company believes are state-of-the-art.

The Company has implemented strict operational protocols and permissions for cryptocurrency movement with its internal operational team to restrict access to customer wallets, and tightly control the movement of cryptocurrencies. More than one person is required to initiate and approve each large transfer, and only a small group of higher-level employees have the necessary privileges to add and authorize new addresses or to release proceeds from wallets. Access to cryptocurrency transfer interfaces is strictly controlled and requires hardware two-factor authentication to log in. To help ensure the Company’s security system functions as designed, its systems undergo security audits and are regularly subject to penetration testing.

In response to the Staff’s comment, the Company has revised its disclosures on pages 8 and 9 of its Form 10-K for the fiscal year ended December 31, 2023 filed with

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the Commission on February 27, 2024 (the “2023 10-K”) to reflect the information provided above.

•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 with the vendor.

The Company respectfully advises the Staff that it does not utilize third-party custodians for settled cryptocurrencies, but it does integrate proprietary technology from a third-party industry-standard vendor into the systems it uses to support the custody, transfer and settlement operations to its wallets.

In response to the Staff’s comment, the Company has revised its disclosure on page 8 of the 2023 10-K to reflect the information provided above.

For completeness, as previously disclosed on pages 55 and 56 of the Company’s Form 10-K for the fiscal year ended December 31, 2022 (the “2022 10-K”) (and as disclosed on page 62 of the 2023 10-K), the Company also engages blockchain analytics vendors to help determine whether the external wallets involved in the Company’s crypto transfers feature, Crypto Transfers, are controlled by persons on prohibited lists or involved in fraudulent or illegal activity.

The Company does not, however, believe that a more detailed description of the technologies used or the industry standards behind them and any deviations thereto in its agreements with such vendors is material to an investor’s understanding of its business, taken as a whole.

•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.

The Company respectfully advises the Staff that it maintains a ledger of customers’ ownership and account balances of cryptocurrencies. Additionally, the Company’s accounting and crypto operations team has established internal control  procedures and maintains records to verify the total quantity of each cryptocurrency that the Company custodies for its customers that are held in the omnibus wallets. Such controls are periodically tested by the Company’s internal financial compliance team.

Furthermore, as a public company, the Company is required to comply with the Sarbanes-Oxley Act of 2002. As part of this, the Company is required to establish and maintain adequate internal control over financial reporting and evaluate the effectiveness of its internal control over financial reporting. This includes the user cryptocurrencies safeguarding obligation and the asset related to user cryptocurrencies safeguarding

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obligation on its consolidated balance sheets in its audited financial statements which represents its obligation to safeguard crypto-assets (including cryptocurrencies) held in its custody on behalf of its users. The effectiveness of the Company’s internal control over financial reporting and its financial statements and related notes are audited by Ernst & Young LLP, its independent registered public accounting firm.

In response to the Staff’s comment, the Company has revised its disclosures on pages 9 and 54 of the 2023 10-K to reflect the information provided above. The Company respectfully advises the Staff that the “internal audit and compliance teams” referred to in the Prior Response Letter is the Company’s accounting and crypto operations team referred to above.

•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.

The Company respectfully advises the Staff that it maintains custody of its customers’ cryptocurrencies in omnibus wallets on behalf and for the benefit of its customers. Following the purchase of cryptocurrencies from liquidity providers, cryptocurrencies are delivered to the secure omnibus wallet, or in the case of a net sell, cryptocurrencies are moved from such wallet to the liquidity provider’s account. As set forth above, (i) the Company has implemented strict operational protocols and permissions for cryptocurrency movement with its internal operational team to restrict access to customer wallets, and tightly control the movement of cryptocurrencies, (ii) the Company maintains a ledger of customers’ ownership and account balances of cryptocurrencies and (iii) the Company’s accounting and crypto operations team has established internal control procedures and maintains records to verify the total quantity of each cryptocurrency that the Company custodies for its customers that are held in the omnibus wallets.

In response to the Staff’s comment, the Company has revised its disclosures on pages 9, 60 and 121 of the 2023 10-K to reflect the information provided above. The Company does not believe further information about how disputes among customers related to the assets in the wallets are resolved is material to an investor’s understanding of its business, taken as a whole, but respectfully advises the Staff that it has comprehensive procedures in place governing such customer claims. The Company further notes for the Staff that it does not lend against or otherwise leverage cryptocurrencies held on behalf of its customers, and customers’ cryptocurrency holdings are maintained at all times one-for-one to the corresponding cryptocurrency held by each customer’s balance according to the Company’s ledger. Furthermore, the Company advises the Staff  that while it has consulted with internal and external legal counsel with

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respect to the statement in the 2022 10-K that “[b]ased on the terms of our user agreement, the structure of our crypto offerings, and applicable law, we believe that the cryptocurrency we hold in custody for users of our platform should be respected as users’ property (and should not be available to satisfy the claims of our general creditors) in the event we were to enter bankruptcy,” it has not obtained a legal opinion from external counsel on this matter.

•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.

The Company respectfully advises the Staff that, as described above, it maintains custody of its customers’ cryptocurrencies in omnibus wallets on behalf and for the benefit of its customers. Additionally, with the exception of small amounts of cryptocurrency it purchases to support its business operations, it does not hold cryptocurrency for its own account and, therefore, does not commingle cryptocurrencies with those of its users. The Company does not engage in lending transactions with cryptocurrencies held on behalf of customers. The Company does not seek to profit from proprietary trading and only facilitates customer transactions. In addition, it has anti-money laundering and insider trading programs intended in part to prevent self-dealing and other potential conflicts of interest, including with respect to its cryptocurrency services.

In response to the Staff’s comment, the Company has revised the disclosure on page 9 of the 2023 10-K to reflect the information provided above. The Company believes that these procedures address the most significant potential concerns related to self-dealing and other potential conflicts of interest. The Company further notes for the Staff that these small amounts of cryptocurrency purchased to support its business operations are not commingled with customer funds, except as incidentally required for the operational use of such currency (e.g., sending payment or network fees in connection with an authorized transfer of customer funds), and subject to the Company’s procedures for such operations, described above. Additionally, the Company notes for the Staff that it does not lend against or otherwise leverage cryptocurrencies held on behalf of its customers, and customers’ cryptocurrency holdings are maintained at all times one-for-one to the corresponding cryptocurrency held by each customer’s balance according to the Company’s ledger.

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.

Response:

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The Company respectfully advises the Staff that, although certain events in 2022, including FTX Trading Ltd. Filing for bankruptcy and the bankruptcies of several other major cryptocurrency trading venues and lending platforms (collectively, the “2022 Crypto Bankruptcies”) did not have any material impact on the Company’s business—and neither the board of directors nor management have to date identified any material gaps or weaknesses with respect to the Company’s existing risk management processes and policies in light of recent cryptocurrency market conditions—the Company remains subject to cryptocurrency market risks. If the Company is unable to effectively identify, prevent or mitigate such risks, the success of its business, its financial condition and results of its operations may be adversely affected.

As part of the Company’s overall risk management processes, its management Enterprise Risk Committee (the “ERC”), which comprises senior leaders of the Company, including the Chief Executive Officer, Chief Financial Officer, Chief Legal, Compliance and Corporate Affairs Officer, Chief Security Officer, Vice President of Risk and Audit, and Chief Brokerage Officer and General Manager of Brokerage, among others, reviews on at least a quarterly basis risks that are escalated by the Company’s Enterprise Risk Management (“ERM”) function. ERM maintains a risk taxonomy and a scoring methodology design to ensure risks are evaluated in a clear and transparent manner, and further escalates top risks to the Safety, Risk and Regulatory Committee of the board of directors (the “Safety Committee”), along with planned mitigants and monitoring procedures. The Safety Committee reviews management’s procedures to identify, assess, manage, monitor and mitigate material risks not allocated to the board of directors or another committee. In addition to RHM-level processes, entity-level risk teams affiliated with the Company’s operating subsidiaries, including one at RHC, perform ongoing risk operations, including risk and control self-assessment