That's way up from 20.8% of transaction revenue in the first quarter of 2021 and just $5 million a year ago. ![]() The scope of the issue became clear when Robinhood reported that payment for order flow from crypto trading made up more than half of its second quarter transaction revenue, representing 51.7% or $233 million. And Robinhood, in particular, is championing the idea of extending the payment for order flow model to the crypto world. But marketplaces have arisen nonetheless, facilitating buying and selling much like stock and currency markets do. Regulators are considering all options including a ban on such arrangements, with Gensler noting that conflicts are "inherent" in a system where market makers pay retail brokers for directing trades to them, in effect splitting profits that come at investors' expense.Ĭryptocurrencies were designed for peer-to-peer transactions, bypassing middlemen and marketplaces. SEC Chairman Gary Gensler has said the agency is scrutinizing payment for order flow, a decades-old business model that is used by large brokers like Schwab and TD Ameritrade but that Robinhood has finessed into profitable perfection. That's not a hypothetical question: Robinhood, the online broker that recently went public, is already making more money from crypto payment for order flow than any other source. ![]() Two of the SEC's major concerns are payment for order flow, the potentially conflict-ridden system where retail brokers get paid by market makers for sending them orders, and cryptocurrencies, the largely unregulated digital tokens that are generating a booming market in speculative trading.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |