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Robinhood agrees to buy cryptocurrency exchange Bitstamp for $200 million
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Robinhood has agreed to buy European cryptocurrency exchange Bitstamp for $200 million, accelerating the U.S. retail broker’s expansion outside its home market and into digital assets.
The California-based group said on Thursday that its purchase of one of the world’s oldest cryptocurrency exchanges will also mark its first foray into targeting institutional investors. The company’s shares rose 5.4% in early trading, reaching their highest level since December 2021.
Robin Hood is looking to take advantage of a renewed wave of investor demand for digital assets as the price of bitcoin nears its all-time high.
In recent months the broker has sought to expand its app from “meme stocks,” the surge in retail trading that has catapulted the company into the mainstream with shifts towards credit cards.
It was at the center of the January 2021 stock market mania that nearly overwhelmed the company, requiring a capital injection from shareholders to shore up his finances.
Its move out of the United States also comes amid intense U.S. regulatory scrutiny of the cryptocurrency sector, following the collapse of the FTX exchange in 2022 and the subsequent 25-year prison sentence for its founder Sam Bankman-Fried earlier this year.
The broker warned last month that it was waiting a lawsuit from the Securities and Exchange Commission over its cryptocurrency business, which offers commission-free trading in 15 cryptocurrencies in most U.S. states.
The SEC has filed a series of lawsuits against some of the largest companies in the market, including Coinbase and Binance, and Consensys has also indicated he expects a lawsuit from the agency.
The approval of bitcoin spot exchange traded funds earlier this year led to renewed optimism and interest in the sector, driving the price of bitcoin to record levels of $73,000.
“The acquisition of Bitstamp is an important step in the growth of our cryptocurrency business,” said Johann Kerbrat, CEO of Robinhood Crypto. “Through this strategic combination, we are better positioned to expand our presence outside the United States and welcome institutional clients.”
Robinhood made 17% of its transaction-based revenue from digital tokens last year and has ramped up its crypto plans, offering trades to customers in the EU since December.
Bitstamp was founded in 2011 and is headquartered in Luxembourg. According to data from CoinMarketCap, it is the 16th largest cryptocurrency exchange by trading volume and allows retail and institutional traders to buy and sell cryptocurrencies, as well as offering cryptocurrency lending and staking.
The exchange obtained registration in the United Kingdom last summer from the Financial Conduct Authority and said it has more than 50 licenses and registrations globally.
Barclays Capital acted as financial advisor to Robinhood while Galaxy Digital Partners advised Bitstamp.