June 23, 2024

Robinhood to Acquire Crypto Exchange Bitstamp for $200 Million

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Trading platform Robinhood Markets announced on Thursday its agreement to purchase crypto exchange Bitstamp for approximately $200 million in cash, marking its most significant acquisition to date and accelerating its push into the digital assets market.

Robinhood, whose shares rose by 3.4% in pre-market trading, has been striving to expand its suite of products and services to evolve into a comprehensive financial services provider. The acquisition of Bitstamp, a crypto exchange founded in 2011 with 50 active licenses and registrations worldwide, positions Robinhood as a formidable competitor against industry heavyweights such as Binance and Coinbase.

Bitstamp’s core spot exchange, which enjoys popularity in Europe and Asia, boasts over 85 tradable assets. The acquisition is anticipated to drive the growth of Robinhood Crypto significantly.

“We are in our early days in the EU and we are excited to keep expanding there and beyond. The acquisition of Bitstamp will accelerate our global expansion,” said Johann Kerbrat, vice president and general manager of Robinhood Crypto, in an interview with Reuters.

The deal is expected to be finalized in the first half of 2025. This strategic move comes at a time when Robinhood’s crypto business is experiencing rapid growth, albeit amid regulatory challenges in the United States.

Kerbrat emphasized the company’s commitment to ongoing communication with regulators as it navigates the regulatory landscape.

Robinhood’s crypto division was the primary driver behind the company’s impressive first-quarter earnings in May. However, the same week saw Robinhood disclose that it had received a Wells notice from the U.S. Securities and Exchange Commission (SEC) regarding the tokens traded on its platform. A Wells notice signals the regulator’s intent to bring enforcement action against a company.

The SEC maintains that crypto tokens should be classified as securities and adhere to its registration requirements. In contrast, crypto firms have accused the SEC of regulatory overreach.

Despite these challenges, Robinhood’s stock has surged by 69% this year, buoyed by its focus on “profitable growth.” Analysts predict further gains for the company, fueled by a resurgence in retail trading and the growing adoption of cryptocurrencies.

Barclays Capital served as the exclusive financial advisor to Robinhood, while Galaxy Digital advised Bitstamp in this transaction.

The acquisition of Bitstamp underscores Robinhood’s ambition to solidify its footprint in the global crypto market, leveraging Bitstamp’s established presence and extensive licenses to enhance its competitive edge and expand its reach across key international markets.

Digital Assets Desk

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