News
Robinhood bets big on cryptocurrencies with $200 million deal for Bitstamp
By Manya Saini
(Reuters) – Trading platform Robinhood Markets said on Thursday it has agreed to buy cryptocurrency exchange Bitstamp for about $200 million in cash, accelerating a broader push into digital assets with its biggest deal ever .
Robinhood, whose shares rose 3.4% before the bell, has been seeking to expand its product offerings to become a full-fledged financial services provider.
The acquisition of Bitstamp, founded in 2011 and which holds 50 active licenses and registrations globally, puts Robinhood in direct competition with industry giants such as Binance and Coinbase.
Bitstamp’s leading spot exchange, popular in Europe and Asia, has over 85 tradable assets and the deal is expected to fuel Robinhood Crypto’s growth.
“We are early days in the EU and are excited to continue expanding there and beyond. The acquisition of Bitstamp will accelerate our global expansion,” Johann Kerbrat, vice president and general manager of Robinhood Crypto, told Reuters.
The deal, expected to close in the first half of 2025, comes at a time when Robinhood’s cryptocurrency business is experiencing rapid growth but also faces regulatory hurdles in the United States.
Kerbrat said the company plans to continue communicating with regulators as it moves forward.
Robinhood’s cryptocurrency business was the driving force behind a massive surge in first-quarter earnings in May, but that same week it also revealed that it had received a so-called Wells Alert from the U.S. Securities and Exchange Commission about tokens trading on its platform.
The notice is issued when the regulator intends to take enforcement action against a company.
The markets regulator argued that crypto tokens should be considered securities and subject to its registration rules. Crypto firms, on the other hand, have accused the SEC of overreaching.
Robinhood shares have risen 69% this year after it said it wanted to focus on “profitable growth.” Analysts expect it to be poised for further gains amid a rebound in retail trading and growing adoption of cryptocurrencies.
Barclays Capital and Galaxy Digital were the exclusive financial advisors to Robinhood and Bitstamp, respectively.
(Reporting by Manya Saini in Bangalore; Editing by Krishna Chandra Eluri and Shounak Dasgupta)