Mobile trading application operator Robinhood announced on Thursday afternoon that it has received a license to provide cryptocurrency trading services in the state of New York.
A statement issued by the company indicates that it has received a virtual currency license – or BitLicense – from local regulators.
The company also said that it has received a money transmitter license that will better enable its clients, as well as the company itself, to make and receive payments.
As a result of its receiving the license, traders living in New York can now trade cryptocurrency, with no commission fees, using the Robinhood mobile application.
Users can invest in seven different cryptocurrencies, including Bitcoin and Ethereum.
Robinhood – from equities to crypto trading
The company launched its cryptocurrency trading service back in February of last year.
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Since then it has been making rapid strides in getting regulatory green lights from local regulators in different states across the great USA.
Robinhood has gained massive traction amongst young Americans, with the company onboarding millions of clients since its founding in 2013.
The company started out providing commission-free trading in stocks, and that remains its most successful product.
Though they claim to make the bulk of their cash interest on client deposits and the $6 a month fee it charges for its ‘gold’ service, it seems that the company’s real money generator is selling order flow to high-frequency traders.
According to a report by financial analyst Logan Kane on Seeking Alpha, the company makes hundreds of millions of dollars selling order flow to these high-frequency trading companies.
Whether or not the company will be able to do the same for its cryptocurrency service is an interesting question. After all, many firms trade in equities but its less clear that they are interested in, or already trading in, cryptocurrencies.