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Robinhood agrees to buy crypto exchange Bitstamp for $200 million
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Robinhood has agreed to buy European cryptocurrency exchange Bitstamp for $200 million, accelerating the US retail broker’s expansion outside of its home market and into digital assets.
The California-based group said Thursday that its purchase of one of the world’s oldest cryptocurrency exchanges would also mark its first foray into targeting institutional investors. Shares of the company rose 5.4 percent in early trading to their highest level since December 2021.
Robin Hood is looking to capitalize on a new wave of demand for digital assets from investors, as the price of bitcoin approaches its all-time high.
In recent months, the broker has sought to expand its application to “meme stocks,” the retail trading boom that has catapulted the company into the mainstream with moves toward credit card.
It was at the center of the January 2021 stock market madness that nearly overwhelmed the company, requiring an injection of capital from shareholders to consolidate his finances.
Its move outside the United States also comes amid increased scrutiny of U.S. regulations on crypto industry, following the collapse of the FTX exchange in 2022 and the subsequent 25-year prison sentence for its founder Sam Bankman-Fried earlier this year.
The broker warned last month that it was waiting a lawsuit from the Securities and Exchange Commission over its crypto business, which offers commission-free trading on 15 cryptocurrencies in most U.S. states.
The SEC has filed a series of lawsuits against some of the biggest companies in the market, including Coinbase and Binance, and Consensys has also noted he is awaiting a trial from the agency.
The approval of Bitcoin spot exchange-traded funds earlier this year led to renewed optimism and interest in the industry, propelling the price of Bitcoin to an all-time high of $73,000.
“The acquisition of Bitstamp is a major step in the growth of our crypto business,” said Johann Kerbrat, CEO of Robinhood Crypto. “With this strategic consolidation, we are better positioned to expand our presence outside the United States and welcome institutional clients. »
Robinhood earned 17% of its trading revenue from digital tokens last year and has been ramping up its crypto projects, offering trading to EU customers starting in December.
Bitstamp was founded in 2011 and is headquartered in Luxembourg. It is the 16th largest cryptocurrency exchange by trading volume, according to CoinMarketCap data, and allows retail and institutional traders to buy and sell cryptocurrencies, as well as offer loans and cryptocurrency staking.
The exchange obtained UK registration last summer with the Financial Conduct Authority and said it had more than 50 licenses and registrations worldwide.
Barclays Capital was the financial advisor to Robinhood while Galaxy Digital Partners advised Bitstamp.