In a research report on Monday, KBW broker indicated that Robinhood Markets Inc. (NASDAQ: HOOD) will likely fight the United States Securities and Exchange Commission (SEC) in court and win. KBW analysts noted that Robinhood only offers trading for 15 crypto assets and will most likely continue with its services. 

Meanwhile, KBW indicated that the US SEC will sue Robinhood in the coming months after yesterday’s Wells notice on its crypto business. According to KBW analysts led by Kyle Voigt, Robinhood does not heavily depend on crypto asset trading for revenue collection.

Moreover, Robinhood’s crypto trading only accounts for about 12 percent of its quarterly revenue. As a result, HOOD stock remained largely unchanged in the last 24 hours to trade around $17.80 on Tuesday.

“Our preliminary view is that HOOD would likely fight the SEC in court and has a higher likelihood to prevail than most U.S. competitors (if put in similar situations) given HOOD’s stricter listings standards,” the analysts noted.

What Next for Robinhood and its Crypto Operations

The debate on whether Ethereum (ETH) is a security or a commodity has escalated in the United States. According to the SEC, Ether is a security as it has people working towards its success, including a website and social media influencers. 

However, Consensys, through its recently filed lawsuit against the US SEC, argued that Ethereum is a global computing platform and not an investment scheme. Robinhood would significantly be compelled to change its operations if the court rules in favor of the US SEC.

“The worst case scenario from a revenue-at-risk perspective is if the SEC chooses to move forward with categorizing ether (ETH) as a security – as this likely makes up ~25% of HOOD’s crypto assets/trading,” the report added.

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