Robinhood Markets has agreed to acquire Bitstamp Ltd., one of the most reputable and ancient cryptocurrency exchanges.
This acquisition aims to expedite Robinhood’s global expansion and establish its presence in the institutional crypto market.
The acquisition of Bitstamp’s extensive global licenses and established crypto platform will expand Robinhood’s offerings, even though regulatory approvals are still pending, and the transaction is anticipated to be finalized in the first half of 2025.
Robinhood and Bitstamp to Merge for Additional Crypto Offerings
Robinhood Markets, a popular investing and trading platform, has agreed to acquire Bitstamp Ltd., a globally recognized cryptocurrency exchange, for approximately $200 million in cash.
Bitstamp was established in 2011 and has a strong presence in the United States, the United Kingdom, Slovenia, and Luxembourg. It has recently received sanction for services in Singapore.
This strategic acquisition is designed to expedite Robinhood Crypto’s global expansion by capitalizing on Bitstamp’s more than 50 active licenses and registrations. The agreement will broaden Robinhood’s customer base by expanding its presence in the EU, UK, US, and Asia. According to JB Graftieaux, the CEO of Bitstamp:
“As the world’s longest-running cryptocurrency exchange, Bitstamp is known as one of the most trusted and transparent crypto platforms worldwide. Bringing Bitstamp’s platform and expertise into Robinhood’s ecosystem will give users an enhanced trading experience with a continuing commitment to compliance, security, and customer-centricity.”
Robinhood has entered the institutional crypto market with this acquisition. Bitstamp is recognized for its industry-leading API connectivity, reliable transaction execution, and deep order books, making it a popular choice among institutional clients.
Additionally, Bitstamp’s institutional offerings—including its white-label solution Bitstamp-as-a-service, institutional lending, and staking—will further strengthen Robinhood’s market position.
Robinhood will also broaden its crypto offerings by incorporating Bitstamp’s primary spot exchange, which offers over 85 tradable assets and products such as staking and lending. According to Johann Kerbrat, the General Manager of Robinhood Crypto:
“The acquisition of Bitstamp is a major step in growing our crypto business. Bitstamp’s highly trusted and longstanding global exchange has shown resilience through market cycles.”
It is anticipated that the final consideration for the transaction will be approximately $200 million in cash, subject to the usual adjustments in the purchase price. The acquisition is expected to be completed in the first half of 2025, provided that regulatory approvals and customary closing conditions are met.
Robinhood Growing Amid Regulatory Battle
Last month, the US Securities and Exchange Commission (SEC) issued a Wells Notice to Robinhood, informing the company that the agency may take enforcement action against the company for alleged violations of the Securities Exchange Act.
Robinhood announced its intention to dispute the SEC in court after this notice. Vlad Tenev, the CEO, expressed his dissatisfaction with the SEC’s actions, characterizing them as part of a more extensive regulatory assault that stifles innovation.
Additionally, he stated that the Securities and Exchange Commission’s inquiry concentrates on cryptocurrency listings, custody, and platform operations, which implies potential violations of the Securities and Exchange Act.
The SEC’s preliminary determination to recommend this action pertains to Robinhood’s platform operations, custodial practices, and cryptocurrency listings.
This notice is the result of Robinhood receiving numerous investigative warnings. Last month, Robinhood’s stock experienced a substantial decline of over 5% due to the Wells Notice.
A comparable Wells Notice given to Consensys in the context of its Ethereum-focused application, MetaMask, indicates that this has led to criticism of the SEC’s aggressive enforcement approach toward digital assets.
Despite the regulatory scrutiny, Robinhood recently disclosed a substantial increase in crypto trading volumes during the first quarter, which soared 224% to $36 billion.
The company’s transaction-based revenue increased by 59% yearly, reaching $329 million due to this development. Crypto-related revenue increased by 232% to $126 million.
Robinhood reported a 78% increase in its holdings of users’ crypto assets, which increased to $26.2 billion at the end of 2023.
