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• Robinhood has raked in nearly half a billion this year from payment for order flow. 
• The amount represents a slight increase from the previous quarter.
• A surge in retail trading has made 2020 a landmark year as the firm eyes a potential IPO in 2021.

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The UK subsidiary of leading enterprise blockchain business R3 lost £19.6m in 2019 after posting a slim profit the previous year, according to the company’s latest filings.

R3 spokespeople say the company is in good health at the group level, however.

“You can’t extrapolate the figures reported in the UK to the wider R3 global business. That would be misleading and foolish!” said R3’s chief communications officer Charley Cooper, in response to questions from The Block.

“So for the bigger picture, R3 is fortunate to be in a very strong cash position. We can confirm the company is not in an overall debt position,” he added.

R3’s New York-headquartered parent company is privately held and does not report annual performance numbers.

In the UK, R3 Limited saw revenues fall 35.6% on the previous year to just over £13m, while costs increased significantly, according to annual accounts covering the 12 months to December 31, 2019, published on October 6. Headcount alone grew from 109 at the end of 2018 to 162 by the end of the following year, raising staff costs 35% to £19.8m.

The UK company also reported £58.2m in debt coming due within one year of December 31, 2019. On the same date, it held roughly £25.2m in cash.

R3 Limited’s annual report states that the UK business’s turnover fell as the result of a change in accounting methodology following a Transfer Pricing study by Deloitte. R3 Limited switched from a “cost-plus basis” in 2018 to a “profit/loss split” with R3 LLC, a US subsidiary of parent company R3 Holdco LLC, in 2019.

In a recent post on such accounting methods, BDO Global explains that profit splits “are typically implemented when the participating parties to an intercompany transaction both (or all) own significant intangibles that are put to use as part of the transaction”, adding that a similar arrangement can apply to cost arrangements.

R3’s private blockchain platform Corda serves as the bedrock for many of Europe’s best-known enterprise blockchain pilot programmes, in addition to supporting the efforts of a number of central banks which are exploring the development of central bank digital currencies.

High profile projects running on Corda include Switzerland’s SIX Group long-awaited digital assets exchange, the Spunta interbank reconciliation system in Italy and Sweden’s CBDC pilot.

R3 began life in 2015 as a project backed by a consortium of global banks, but later morphed into a private business. The company raised $107m from a number of big banks and Intel, the technology firm, in May 2017.

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

In a bid to woo institutional investors and large financial services firms to the digital asset market, crypto tax and data provider Lukka has teamed up with information services giant IHS Markit to provide its data products to Wall Street. 

In an announcement Wednesday, Lukka — best known for its retail crypto tax business — said the partnership would allow it to redistribute its flagship data through the Nasdaq-listed IHS Markit. Hence, Lukka’s crypto data will join more than 23 million market data points that exist on IHS Markit’s platform, which focuses on a range of assets from credit default swaps to minimal bonds.

Already, more than 160 crypto-native hedge fund clients leverage Lukka’s data products, including Lukka Reference, which provides a single price for crypto assets, gleaning from several exchanges, over-the-counter trading desks, and wallets. 

It’s not exactly clear how many people on IHS Markit’s platform will actually use Lukka’s data or what the demand will be.

“I think it is probably a bit early to comment on that,” Daniel Huscher, a managing director at IHS Markit, told The Block in an interview. “It’s an existing partnership, we want to be known as a company that’s committed to innovation.” 

The access to Lukka’s data would allow IHS Markit’s asset management clients, for instance, to price crypto assets, thereby simplifying the post-trade and settlement process. 

IHS isn’t the first data provider to dabble with crypto. Financial data giant Bloomberg LP, for instance, teamed up with Mike Novogratz’s Galaxy Digital in 2018 to launch a crypto index to track the performance of the largest cryptocurrencies. ICE, the parent company of the New York Stock Exchange, offers the ICE Cryptocurrency Data Feed through a partnership with Blockstream. 

As for Lukka’s tie-up with IHS Markit, Lukka’s recently-hired CEO Robert Materazzi said it would be the first of many partnerships for the firm. 

“You’re going to see some press that aligns with what you’re thinking,” Materazzi told The Block.

“The traditional global custodians and fund admins have all been working on something with crypto and blockchain for some time. Direct conversations we are having with big logos shows [crypto] are finally touching their businesses instead of the innovation labs,” he continued.

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.