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Robinhood, the popular trading platform, announced its second-quarter results, marking a significant achievement of turning profitable for the first time since going public.

Despite a decline in revenue during the second quarter of 2023, the company managed to report a net income of $25 million and earnings per share (EPS) of $0.03.

This is in stark contrast to the first quarter of the year when they had incurred a net loss of $511 million and an EPS of -$0.57.

The drop in revenue was notable in several transaction-based sources. Revenue from cryptocurrency transactions decreased by 18% to $31 million, while options and equities revenue also witnessed declines of 5% to $127 million and 7% to $25 million, respectively.

Over the past year, the company’s revenue has experienced an overall decrease of 4%, going from $202 million in June of the previous year to $193 million.

Despite the revenue dip, Robinhood managed to improve its total operating expenses, leading to its profitable Q2 results.

The earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a remarkable 31% sequential increase, reaching $151 million, with a corresponding margin gain of five percentage points, reaching 31%.

EBITDA is a crucial metric used by analysts and investors to gauge a company’s operational performance within its industry.

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Robinhood’s total assets under custody experienced a 13% growth, reaching $89 billion in the last quarter. The increase was attributed to higher equity valuations and consistent net deposits.

Moreover, the company showed promising progress in its crypto assets under custody, which grew from $8.431 billion in December 2022 to $11.503 billion in June 2023.

Vlad Tenev, the CEO and co-founder of Robinhood Markets, expressed his satisfaction with the achievement, stating, “In Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company.”

GAAP stands for Generally Accepted Accounting Principles, representing standard accounting principles and guidelines used by companies for financial reporting.

The report revealed that Robinhood’s net deposit for the quarter amounted to $4.1 billion, reflecting an annualized growth rate of 21% concerning assets under custody in Q1 2023.

Additionally, the net deposits over the past 12 months amounted to $16.1 billion, indicating a growth rate of 25% over the course of a year.

Overall, despite the drop in revenue from certain transactions, Robinhood’s second-quarter results marked a significant turning point, as they successfully achieved profitability and demonstrated positive growth trends in various aspects of their business operations.

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Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has taken legal action against eToro, a popular trading platform, over its contract for difference (CFD) product.

ASIC alleges that the platform used inadequate screening tests when offering leveraged derivative contracts to retail investors.

CFDs are a type of leveraged derivative that allows buyers to speculate on the price movements of various underlying assets, including foreign exchange rates, stock market indices, single equities, commodities, and cryptocurrencies.

eToro offers a wide range of CFDs, but ASIC claims that these products are “high-risk and volatile.”

The regulator’s main concern is that eToro’s screening test for the CFD product was insufficient and failed to exclude unsuitable customers.

Clients could easily manipulate their answers to meet the platform’s requirements, making the test ineffective in determining suitable users.

As a result, many customers who were not adequately informed about the risks of CFD trading ended up trading these products.

The specific risks associated with eToro’s crypto CFDs are highlighted, with up to two times leverage on certain assets making them particularly high-risk. ASIC believes that the platform’s target market was too broad, encompassing users who lacked an understanding of CFD trading risks.

ASIC alleges that between October 5, 2021, and June 14, 2023, nearly 20,000 of eToro’s clients suffered losses while trading CFDs.

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The regulator asserts that these losses were partly due to the platform’s insufficient screening and broad target market.

In response to the legal action, an eToro spokesperson informed Cointelegraph that the company had revised its target market determination for CFDs.

However, they did not specify when the revision took place.

While the proceedings are ongoing, eToro asserts that its service remains uninterrupted. The company is considering ASIC’s allegations and will respond accordingly.

ASIC’s deputy chair, Sarah Court, criticized CFD issuers like eToro for attempting to adjust their target markets to fit their existing client bases.

She expressed disappointment in the platform’s alleged lack of compliance with regulatory guidelines.

This legal action against eToro comes in the wake of similar challenges in the United States, where the platform had to halt trading in four cryptocurrencies after the Securities and Exchange Commission labeled them as securities in separate lawsuits.

In conclusion, ASIC’s lawsuit against eToro centers around the platform’s alleged failure to adequately assess its CFD products’ suitability for retail investors and the wide target market that included customers with little understanding of the risks involved.

The case serves as a reminder of the importance of robust compliance with financial regulations to protect investors and ensure fair practices in the financial markets.

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According to economists at Goldman Sachs, artificial intelligence (AI) is poised to make a greater financial impact on the American economy than even electricity and personal computers did.

In their investment report released on August 1, Goldman Sachs economists Joseph Briggs and Devesh Kodnani projected that AI could attract up to $200 billion in global investments by 2025, with approximately half of that investment occurring in the United States.

This surge in AI investment is expected to contribute significantly to the country’s gross domestic product (GDP).

While previous technological booms associated with the introduction of electricity and PCs saw a 2% growth in GDP, the economists estimated that AI could be responsible for up to 4% of GDP growth in the United States and 2.5% in other nations that are already heavily investing in AI technologies.

Goldman Sachs attributed a significant portion of these anticipated gains to the rapid advancements being made in generative AI.

Generative AI, which includes technologies like OpenAI’s chatbot ChatGPT, image creation software Midourney, and text-to-speech generator Eleven Labs, is expected to have enormous economic potential.

The economists predicted that generative AI could boost global labor productivity by over 1 percentage point annually in the decade following widespread adoption.

However, while generative AI offers promising productivity benefits, businesses will need to make substantial upfront investments in physical, digital, and human capital to acquire and implement these new technologies and transform their business processes.

Goldman Sachs also highlighted the increasing prevalence of AI adoption among companies, with 16% of Russell 3000 companies mentioning AI in their earnings calls.

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This figure represents a significant increase from less than 1% in 2016, indicating that America is taking the lead in AI innovation.

The economists believe that American companies are likely to be early adopters due to the country’s position as a market leader in AI technology.

Regarding the timing of the AI investment cycle, it remains challenging to predict precisely. However, based on current business surveys, the economists suggest that AI will start to have its most significant investment impact after 2025.

In conclusion, economists at Goldman Sachs are optimistic about the financial potential of AI in the American economy.

They project that AI investments could be substantial, leading to substantial GDP growth and improved productivity in various sectors.

Although the transformation brought about by AI will require significant upfront investments from businesses, the potential benefits are expected to be substantial and could drive the American economy to new heights.

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U.S. Senators Elizabeth Warren, Bernie Sanders, Bob Casey, and Richard Blumenthal have sent a letter to the Internal Revenue Service (IRS) and the Treasury, urging them to take swift action in closing tax loopholes that are being exploited by “crypto tax evaders.”

The lawmakers emphasized that failure to act promptly could result in a “crypto tax gap” of $50 billion, leading to a potential loss of $1.5 billion in tax revenue for the 2024 financial year if tax policy updates are delayed.

The senators’ concerns stem from the tax laws outlined in the Senate’s $1.2 trillion infrastructure bill, which was passed in August 2021.

The bill aimed to increase tax reporting requirements for businesses operating as crypto brokers. Despite the bill being signed into law, the Treasury and IRS have yet to release their new tax rules.

The deadline for their implementation is December 31, and the senators are calling for an expedited process.

Elizabeth Warren has been a vocal critic of the cryptocurrency industry in the United States and even made it a central focus of her Senate re-election campaign, forming an “anti-crypto army.”

Bernie Sanders, though less vocal about crypto, has co-signed letters with Warren seeking tighter restrictions on the space.

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A recent poll commissioned by Grayscale Investments revealed that 59% of Democrats and 51% of Republicans view cryptocurrencies as the future of finance, suggesting that Warren’s anti-crypto stance might not resonate with the majority of the population.

The senators’ letter serves as a reminder of the growing concern among lawmakers about potential tax evasion facilitated by cryptocurrencies.

They stress the importance of implementing robust regulations promptly to prevent tax evaders and intermediaries from exploiting the system and diverting billions of dollars annually from the U.S. government.

With the clock ticking and the deadline approaching, the lawmakers are pushing for the IRS and Treasury to take action immediately to address the crypto tax gap and ensure a fair and transparent tax system for all citizens.

Whether the agencies will act promptly in response to the senators’ letter remains to be seen, but the call for regulatory clarity in the crypto space continues to gain momentum.

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A recent study conducted by the Network Contagion Research Institute (NCRI) has shed new light on the role of crypto-spouting Twitter bots in artificially inflating the prices of altcoins.

The study, published on August 2, utilized a sample of various FTX-listed cryptocurrencies and analyzed over 3 million tweets posted between January 1, 2019, and January 27, 2023, involving 18 altcoins.

The findings of the study revealed that Twitter bot activity played a crucial role in amplifying the value of these cryptocurrencies.

Notably, altcoins like The Sandbox (SAND), Gala (GALA), Gods Unchained (GODS), and LooksRare (LOOKS) showed signs of price influence due to tweet bot activity.

Almost half of the coins examined displayed an impact on prices as a result of this inauthentic activity.

Moreover, the study indicated that the volume of inauthentic tweets increased significantly after FTX posted about the token on social media.

This raised concerns about the potential involvement of FTX or Alameda Research in coordinating the bot activity to artificially inflate market values.

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The researchers also investigated the impact of Twitter bot activity and Elon Musk’s crypto-related tweets on two memecoins, Pepe (PEPE) and PSYOP.

The study revealed a surge in newly created bot accounts just before the launch of PEPE, all of which subsequently tweeted about one of the two coins.

Additionally, both Pepe Coin and PSYOP were bolstered by two of Musk’s tweets that seemingly endorsed each token.

For instance, Musk’s Pepe meme tweet caused the token’s price to surge by over 50% within 24 hours.

The study raises questions about the potential ramifications of coordinated inauthentic activity on social media, not only in the cryptocurrency market but also in stocks and other securities.

The researchers cited the social media frenzy in 2022 surrounding so-called “meme stocks” like GameStop and AMC as an example of how such manipulative tactics could affect traditional financial assets.

In conclusion, the NCRI study has highlighted the significant impact of crypto-spouting Twitter bots on the prices of altcoins, suggesting that inauthentic networks deliberately deployed these bots to influence market values.

As the cryptocurrency market continues to evolve, it becomes increasingly important for regulators and platforms to be vigilant against such manipulative practices to maintain market integrity and protect investors.

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