Robinhood to buy Bitstamp crypto exchange to enable institutional trading in the US
Stock trading app Robinhood is expanding its presence in the cryptocurrency industry by acquiring cryptocurrency exchange Bitstamp.
Robinhood buys Bitstamp for $200 million, allowing the app to serve institutional clients in the United States.
The deal, subject to regulatory approval, is expected to close in the first half of 2025.
The decision to buy the exchange is due to customers increasingly looking for cryptocurrency products, Robin Hood Crypto CEO Johannes Kerbrat told The Wall Street Journal on June 6.
“Everything we've been doing in the last few years has been about our engagement with customers because they want more crypto products.”
According to Vlad Tenev, co-founder and CEO of Robinhood, Crypto will “fundamentally reorganize the financial system,” which is why Robinhood decided to acquire Bitstamp. Tenev wrote in a June 6 X post:
“We will soon combine forces with Bitstamp's global footprint, a premier exchange, and industry-leading products such as crypto-as-a-service, institutional lending and staking.”
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Robinhood expands crypto offerings despite regulatory pressure
Robinhood has been working to expand its cryptocurrency offerings since at least 2018, when it began offering Bitcoin (BTC) and Ether (ETH) trading to users.
The acquisition of Bitstamp will allow Robinhood to pursue its institutional-level offerings, including institutional lending and payments and Bitstamp-as-a-service white-labeling solution.
The deal marks a major step forward for Robinhood's crypto offering, Kerbrat wrote:
“Bitstamp's most trusted and long-standing global exchange has demonstrated resilience through market cycles. By seamlessly combining customer experience with the security of geographies, the Bitstamp team has established one of the strongest positions among retail and institutional crypto investors.
Founded in 2011, Bitstamp holds over 50 active regulatory licenses and registrations worldwide. Bitstamp will continue to operate under the branding despite the upcoming acquisition.
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Will the SEC Sue Robinhood?
The acquisition comes despite Robinhood's legal issues in the United States.
On May 4, Robinhood received a notice of Wells from the US Securities and Exchange Commission (SEC). Wells' notice is a letter from the securities regulator concluding an investigation into the respondent, in this case Robinhood's US-based crypto business.
According to the filing, the SEC has been investigating Robinhood's cryptocurrency listings and crypto custodian operations and has made a “preliminary determination” to recommend that the SEC file an enforcement action related to alleged securities violations.
Dan Gallagher, chief legal, compliance and corporate affairs officer at Robinhood Markets, said Robinhood is trying to register with U.S. securities regulators, but the legal action is possible.
Gallagher wrote in a May 6 blog post:
“After years of trying to work with the SEC in good faith, including our famous attempt to ‘come and file' for regulatory transparency, we are disappointed that the agency has decided to issue a Wells notice related to US crypto businesses.”
Wells' announcement does not indicate that the SEC will file a lawsuit against Robinhood. The stock trading platform indicated that it will continue to cooperate with the securities regulator to avoid potential violations.
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