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Robinhood Expands into Crypto with $200 Million Bitstamp Acquisition Amid SEC Scrutiny

Robinhood, a stock trading app, is set to expand its footprint in the cryptocurrency industry by acquiring the Bitstamp cryptocurrency exchange in a $200 million deal.

This acquisition will allow Robinhood to cater to institutional clients in the United States.

The transaction is awaiting regulatory approval and is anticipated to close in the first half of 2025.

Johann Kerbrat, the general manager of Robinhood Crypto, cited increasing customer demand for cryptocurrency products as the driving force behind the acquisition.

Speaking to The Wall Street Journal on June 6, he noted, “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.”

Robinhood’s co-founder and CEO, Vlad Tenev, emphasized the transformative potential of cryptocurrency in a June 6 X post: “Soon we’ll combine forces with Bitstamp’s global footprint, core spot exchange and industry-leading products like crypto-as-a-service, institutional lending, and staking.”

The acquisition aims to leverage Bitstamp’s established offerings, such as institutional lending and staking, alongside its white-label solution.

Robinhood has been broadening its cryptocurrency services since 2018, initially offering Bitcoin and Ether trading.

Kerbrat highlighted the strategic importance of the deal, stating, “Bitstamp’s highly trusted and long-standing global exchange has shown resilience through market cycles.

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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 boasts over 50 regulatory licenses and registrations globally and will continue to operate under its own branding post-acquisition.

However, the deal coincides with potential legal challenges for Robinhood.

On May 4, the U.S. Securities and Exchange Commission (SEC) issued a Wells notice to Robinhood, signaling the conclusion of its investigation into the company’s U.S.-based crypto business.

The SEC is considering enforcement action related to alleged securities violations concerning Robinhood’s cryptocurrency listings and custodian operations.

Despite these challenges, Dan Gallagher, Robinhood’s chief legal officer, expressed disappointment in a May 6 blog post, stating, “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.” Robinhood remains committed to cooperating with the SEC to resolve these issues.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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