Robinhood Doubles Down on Crypto With Deal for Bitstamp Move comes a month after SEC notice of a potential lawsuit over the brokerage’s crypto offerings By Caitlin Ostroff Updated June 6, 2024 10:01 am ET Robinhood’s revenue from crypto trading more than tripled in the first quarter. PHOTO: AMIR HAMJA FOR THE WALL STREET JOURNAL Robinhood HOOD 4.75%increase; green up pointing triangle is wading deeper into crypto with a $200 million deal for Bitstamp, despite the Securities and Exchange Commission’s warning that it plans to sue the brokerage over its digital-assets business. The deal for the crypto exchange comes a month after Robinhood disclosed that it received a so-called Wells notice that the regulator is preparing to sue the company over alleged violations of securities laws. The acquisition is Robinhood’s largest to date and would allow the firm to serve institutional crypto clients and expand its crypto offerings internationally, the company said. Bitstamp holds more than 50 licenses and registrations globally. Founded in 2011, Bitstamp is a smaller crypto exchange than many of its rivals, ranking behind Binance, Coinbase and Kraken in monthly trading volume, according to the crypto analytics firm CCData. Robinhood has been focused on becoming more than just a trading app for newbie stock and options investors. The brokerage rolled out retirement accounts last year, launched a credit card in March and is planning to add such features as futures trading later this year Its revenue from crypto trading ballooned in the first quarter, surging to $126 million from $38 million a year earlier. Crypto assets under custody more than doubled to $26 billion at the end of March from a year earlier. Monthly notional crypto trading volume nearly tripled year over year in April. “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,” Johann Kerbrat, general manager of Robinhood Crypto, said in an interview. Kerbrat said the acquired exchange would continue to operate under the Bitstamp brand. The deal, which is subject to regulatory approval, is expected to close in the first half of next year. Robinhood began offering cryptocurrency trading in 2018, starting with bitcoin and ether, the two largest cryptocurrencies. The brokerage firm has in the past been more conservative than many crypto-oriented businesses in the number of digital currencies it allows customers to trade and the services it provides. Robinhood hasn’t allowed customers to earn yield on their crypto holdings through lending or “staking,” a type of service that has landed other firms in hot water with the SEC. In staking, crypto investors pledge their crypto holdings to a network for a specified period, earning money. With its acquisition of Bitstamp, Robinhood will expand its crypto products into those areas in international markets. In the U.S., it will focus on enabling crypto-for-crypto trading among institutional clients. The Wells notice wasn’t a final indication that the SEC will sue Robinhood. Firms that receive such notices are allowed to respond and tell the agency why it shouldn’t proceed with a civil lawsuit. “We’re obviously disappointed about the notice, but we’re going to keep working with the regulator. At the same time, Robinhood Crypto is here to stay,” Kerbrat said. “We feel very good about our offering in the U.S.” The SEC has stepped up litigation against the crypto industry, saying firms must comply with securities laws to ensure that investors in nascent digital-currency markets benefit from the same disclosures and protections against fraud and manipulation that exist in the stock market. The crypto industry argues that securities laws dating back to the 1930s are out of date and poorly suited to digital currencies. Crypto firms and executives have piled money into the coming election in the hopes of getting more crypto-friendly legislation passed in Congress.
More importantly than this … there have been over 1.5 billion in inflows to the us bitcoin etfs THIS WEEK! including almost 1 billion on Tuesday alone The whole complex (including GBTC) now has over 62 billion, and they only have been around for 5 months man that’s a lot of people buying a Ponzi scheme huh?
Wish I had shorted PUTs on HOOD before the rally started many months ago. I had been tempted as the bottom was holding for a long time.
Is that how you always plan your trades? In hind-sight? My crystal ball has limitations. Let's not try to be Youtube gurus on a Meta-trader account here.
I used Bitstamp going back to 2011. But around 2016 they told me it was not available inside USA so I switched to Binance. Did Robinhood get Bitstamp approved inside of USA again. I loved using Bitstamp. I kinda stopped following Bitstamp after 2016. Back then..I used LocalBitcoin also. I met some great people using that...gained great bitcoin info and strategy. Both Bitstamp and LocalBitcoin became illegal inside of USA..."the land of the free" I found Bitcoin while working in Estonia. I was doing C++ coding... my fellow office workers were ranting about the fall of Mt Gox. I was just really starting to get interested in Bitcoin. There was also programmers working with us from Slovenia. A hellva lot of interesting stuff came out of all that...Nokia, Linux, Skype, ect.. In a kinda world prospective. The very smartest seem to be in North Asia (Taiwan, South Korea, Japan..ect) and then leading edge technology moves across china, russia to North Eastern Europe. By the Time it gets to USA ..it like 20 years old. Meanwhile...local physical gold prices are "sky rocketing" in Vietnam at local gold shops.