Robinhood CEO Vladimir Tenev
Robinhood CEO Vladimir Tenev attends a meeting with President Donald Trump and cryptocurrency executives at the White House in Washington, D.C., on Aug. 19, 2026. Getty Images

The U.S. Supreme Court agreed Friday to hear Robinhood Markets' (NASDAQ: HOOD) appeal in an investor lawsuit over its $2.1 billion initial public offering in 2021, bringing fresh scrutiny to the trading platform as its cryptocurrency business faces another slowdown.

The decision comes as cryptocurrency-related stocks, including Robinhood, face pressure from a broader selloff that pushed Bitcoin below $70,000 this week. The company also reported a sharp decline in cryptocurrency trading activity in its latest monthly operating figures.

Robinhood said Thursday that cryptocurrency trading volume fell 48% from a year earlier to $17 billion in October, even as equity trading volumes rose 2% to $325 billion. The company had 28.9 million funded customers at the end of the month, an increase of 1.8 million from a year earlier.

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The latest figures highlight how changes in retail trading activity continue to affect Robinhood's business, five years after a surge in meme stocks and cryptocurrencies helped fuel its Wall Street debut.

According to Reuters, investors allege that Robinhood failed to disclose weakening trading activity and customer trends before its July 2021 IPO.

The plaintiffs claim the company had become increasingly dependent on trading in assets such as GameStop shares and Dogecoin, even as the speculative frenzy was fading and traditional customers were leaving the platform.

They argue that subsequent declines in revenue and operating metrics contributed to a sharp fall in Robinhood's share price.

Robinhood priced its IPO at $38 per share, raising approximately $2.1 billion. The company has denied wrongdoing, arguing that its offering documents warned investors that trading activity could decline from the unusually high levels recorded in early 2021.

A federal judge dismissed the lawsuit in January 2024, but the 9th U.S. Circuit Court of Appeals revived part of the case in August 2025. Robinhood subsequently appealed to the Supreme Court.

The justices will consider whether companies can face liability for omitting material financial information from IPO registration documents without showing that the omission made an existing statement misleading.

The Trump administration supported Robinhood's request for Supreme Court review.

The lawsuit comes as Robinhood expands beyond its original stock-trading business. Its October operating figures showed customers traded 5.9 billion event contracts, up 136% from a year earlier, reflecting growing activity in prediction markets.

Robinhood also reported record third-quarter revenue of $1.4 billion, up 12% year over year.

The Supreme Court has not ruled on the investors' allegations. Arguments and a decision are expected by the end of June 2027.