Robinhood, the popular stock trading app, is making a bold move into the cryptocurrency space with the acquisition of Bitstamp, a globally recognized crypto exchange. This $200 million deal, announced on June 6th, signifies Robinhood’s commitment to becoming a major player in the crypto industry.
The acquisition, subject to regulatory approval, is expected to close in the first half of 2025. According to Johann Kerbrat, General Manager of Robinhood Crypto, the decision to buy Bitstamp was driven by user demand for more crypto products. “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,” Kerbrat told The Wall Street Journal.
Robinhood co-founder and CEO Vlad Tenev echoes this sentiment, believing that cryptocurrency “will fundamentally reorganize the financial system.” In a post, Tenev highlights the combined strengths of Robinhood and Bitstamp:
“Soon we’ll combine forces with Bitstamp’s global footprint, core spot exchange and industry-leading products like crypto-as-a-service, institutional lending, and staking.”
This acquisition isn’t Robinhood’s first foray into crypto. Since 2018, the platform has offered Bitcoin and Ethereum trading for users. With Bitstamp, Robinhood gains access to institutional-grade offerings like lending, staking, and white-label solutions. This expands Robinhood’s crypto capabilities significantly.
“Bitstamp’s highly trusted and long-standing global exchange has shown resilience through market cycles,” says Kerbrat. “By seamlessly coupling customer experience with safety across geographies, the Bitstamp team has established one of the strongest reputations across retail and institutional crypto investors.”
Founded in 2011, Bitstamp boasts over 50 regulatory licenses and registrations worldwide. Notably, Bitstamp will continue to operate under its own branding after the acquisition.
Also Read: Robinhood’s Crypto Wallet Goes Global on Android, Bringing DeFi Tools to Millions
However, Robinhood’s crypto ambitions face potential legal hurdles. In May 2024, the U.S. Securities and Exchange Commission (SEC) issued a Wells Notice to Robinhood. This notice indicates a potential enforcement action regarding alleged securities violations related to Robinhood’s crypto listings and custody operations. Despite Robinhood’s efforts to register with the SEC, the regulatory uncertainty remains.
Despite the legal challenges, Robinhood’s acquisition of Bitstamp signals a significant push into the crypto market. Whether they can navigate regulatory hurdles and integrate Bitstamp’s offerings seamlessly remains to be seen. One thing’s for sure – Robinhood’s crypto ambitions are a major development for the industry, and their success could shape the future of crypto investing for both retail and institutional players.
Also Read: Kraken Eyes $100 Million Funding Round Amidst IPO Speculation and SEC Lawsuit
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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