Robinhood to buy Bitstamp crypto exchange to enable institutional trading in US

Avatar


Stock trading app Robinhood is expanding its presence in the cryptocurrency industry by acquiring the Bitstamp cryptocurrency exchange.

Robinhood will purchase Bitstamp in a $200 million deal, enabling the app to serve institutional clients in the United States.

The deal, subject to regulatory approval, is expected to be finalized in the first half of 2025.

The decision to buy the exchange was due to customers wanting increasingly more cryptocurrency products, Johann Kerbrat, the general manager of Robinhood Crypto, told WSJ, according to a June 6 report:

“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.”

Related: 63 US banks on the brink of insolvency: Why Bitcoin’s next target is $100K

Robinhood expands crypto offerings despite regulatory pressure

Robinhood has been working on expanding its cryptocurrency offerings since at least 2018 when it first started offering Bitcoin (BTC) and Ether (ETH) trading for users.

The acquisition of Bitstamp will enable Robinhood to tap into its institutional-grade offerings, including institutional lending and staking, and the Bitstamp-as-a-service white-label solution.

The deal marks a significant development for growing Robinhood’s crypto offering, according to Kerbrat, who wrote:

“Bitstamp’s highly trusted and long-standing global exchange has shown resilience through market cycles. 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 holds over 50 active regulatory licenses and registrations worldwide. Bitstamp will continue to function under its branding, despite the upcoming acquisition.

Related: Tether CEO warns of new wave crypto airdrop scam emails, CoinGecko potentially affected

Will the SEC sue Robinhood?

The acquisition comes despite Robinhood’s potential legal issues in the United States.

On May 4, Robinhood received a Wells notice from the United States Securities and Exchange Commission (SEC). The Wells notice is a letter sent from the securities regulator that concludes its investigation of the respondent, in this case, Robinhood’s U.S.-based crypto business.

According to the filing, the SEC has been investigating Robinhood’s cryptocurrency listings and crypto custodian operations and made the “preliminary determination” to recommend that the SEC file an enforcement action related to alleged securities violations.

How the U.S. SEC is waging an undeclared war on crypto. Source: Cointelegraph

The potential legal action came despite Robinhood’s attempts to register with the U.S. securities watchdog, according to Dan Gallagher, the chief legal, compliance and corporate affairs officer at Robinhood Markets.

Gallagher wrote in a May 6 blog post:

“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 Wells notice does not necessarily indicate that the SEC will sue Robinhood. The stock trading platform has indicated it will continue to cooperate with the securities regulator to avoid any potential violations.

Magazine: Caitlyn Jenner meme coin ‘mastermind’s’ celebrity price list leaked