- Robinhood has agreed to acquire digital currency marketplace Bitstamp for $200 million in cash.
- The acquisition will help Robinhood fuel its global expansion and serve institutional clients, a new market for the company.
- The acquisition announcement comes one month after Robinhood received a Wells Notice from the SEC for violating Sections 15(a) and 17A of the Securities Exchange Act.
Hours after I published a piece mourning the lack of application of the blockchain in fintech, I get to report on some news that proves me wrong. Digital stock brokerage app Robinhood has agreed to acquire digital currency marketplace Bitstamp for $200 million in an all-cash deal.
U.K.-based Bitstamp has offices in Luxembourg, the U.K., Slovenia, Singapore, and the U.S. and holds over 50 active licenses and registrations globally. Robinhood, which made its first foray into crypto in 2018, anticipates the deal will “significantly accelerate Robinhood Crypto’s expansion worldwide.” Specifically, Robinhood said that Bitstamp will bring Robinhood customers from across the E.U., U.K., U.S., and Asia.
The move will also help Robinhood cater to its first institutional clients. Until now, Robinhood has primarily catered to individual retail investors. Bitstamp, on the other hand, already has a strong presence in the institutional market. The company offers trade execution, deep order books, API connectivity, white label solutions, institutional lending, and staking. By integrating Bitstamp’s services and established relationships into its existing operations, Robinhood can start offering services specifically designed for serving larger, more complex clients such as large financial organizations, investment firms, and professional traders.
“The acquisition of Bitstamp is a major step in growing our crypto business. Bitstamp’s highly trusted and long standing global exchange has shown resilience through market cycles. 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,” said Robinhood Crypto General Manager Johann Kerbrat. “Through this strategic combination, we are better positioned to expand our footprint outside of the U.S. and welcome institutional customers to Robinhood.”
Bitstamp launched its crypto exchange in 2011 and currently has more than 5 million retail and institutional customers. The company’s core spot exchange offers over 85 tradable assets, as well as products such as staking and lending,
“As the world’s longest running cryptocurrency exchange, Bitstamp is known as one of the most-trusted and transparent crypto platforms worldwide,” said Bitstamp CEO JB Graftieaux. “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.”
Notably, Robinhood’s announcement comes a month after the California-based company received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) for violating Sections 15(a) and 17A of the Securities Exchange Act. “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,” said Robinhood Markets Chief Legal, Compliance, and Corporate Affairs Officer Dan Gallagher in a statement at the time. “We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
The $200 million cash amount is subject to customary purchase price adjustments, and the deal is subject to closing conditions such as regulatory approvals and is expected to be finalized in the first half of 2025.
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