June 9, 2024
Robinhood Bitstamp Acquisition
Latest Cryptocurrency News

Robinhood Buys Bitstamp for $200 Million to Boost Crypto Services

In a significant move to strengthen its cryptocurrency presence, Robinhood has announced its acquisition of the Bitstamp cryptocurrency exchange for $200 million. This strategic purchase aims to extend Robinhood’s services to institutional clients in the United States.

Deal Expected to Close in 2025

The acquisition, pending regulatory approval, is expected to be finalized in the first half of 2025. Johann Kerbrat, the general manager of Robinhood Crypto, highlighted the rationale behind this decision, emphasizing the increasing demand for cryptocurrency products among customers. Kerbrat stated, “Everything we’ve been doing in the past few years has been because our engagement from customers has been that they want more crypto products.”

Expanding Crypto Offerings Amidst Regulatory Challenges

Robinhood’s entry into cryptocurrency began in 2018 with Bitcoin and Ethereum trading. The purchase of Bitstamp will enable Robinhood to leverage Bitstamp’s institutional-grade offerings, including lending, staking, and its white-label solution, Bitstamp-as-a-service. Kerbrat praised Bitstamp’s resilience and strong reputation among retail and institutional crypto investors. Founded in 2011, Bitstamp holds over 50 regulatory licenses and registrations worldwide and will continue to operate under its existing branding post-acquisition.

Potential Legal Issues with the SEC

This expansion comes amidst potential legal challenges for Robinhood in the United States. On May 4, the company received a Wells notice from the U.S. Securities and Exchange Commission (SEC). This notice indicates the SEC’s preliminary determination to recommend an enforcement action regarding Robinhood’s cryptocurrency listings and custodial operations. Despite these potential issues, Robinhood remains committed to cooperating with the SEC to avoid any legal violations.

Dan Gallagher, Robinhood’s chief legal officer, expressed disappointment over the SEC’s decision, stating, “After years of good faith attempts to work with the SEC for regulatory clarity, including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business.” The notice does not guarantee that the SEC will sue Robinhood, and the company aims to continue working towards regulatory compliance.

Robinhood’s Commitment

Robinhood’s acquisition of Bitstamp is a significant step in its strategy to expand its cryptocurrency offerings. Despite facing potential legal challenges, the company is determined to meet the growing demand for crypto products and strengthen its market position. As Robinhood navigates these regulatory hurdles, its commitment to enhancing customer experience and safety in the cryptocurrency space remains steadfast.

Image by freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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