Robinhood announced its plans to acquire crypto exchange BitStamp for $200 million in cash, aiming to expand its crypto business globally. BitStamp, founded in Slovenia in 2011, holds over 50 active licenses to operate worldwide, with most of its revenue coming from Europe.
Johann Kerbrat, general manager of Robinhood Crypto, highlighted the significance of the acquisition, stating that BitStamp’s trusted global exchange has demonstrated resilience across market cycles. However, amidst these expansion plans, Robinhood faces regulatory challenges at home. The Securities and Exchange Commission (SEC) issued a Wells Notice to the company, indicating a potential lawsuit for alleged violations of securities law. Despite this, Robinhood remains optimistic and is prepared to engage with the SEC to defend its position.
Robinhood’s acquisition of BitStamp marks its entry into the institutional business and expands its services to include staking and lending internationally. The SEC, under chairman Gary Gensler, has been active in regulating the crypto industry, achieving some legal victories but also facing setbacks.
Despite regulatory hurdles, Robinhood’s push into crypto has proven fruitful, with first-quarter revenue from crypto transactions reaching $126 million, a significant increase from the previous year. With crypto trading becoming a key revenue driver for the company, Robinhood’s stock saw a 1.45% increase following the acquisition announcement.
Vocabulary List:
- acquire (verb): To obtain or get possession of something.
- expand (verb): To make larger or more extensive.
- resilience (noun): The ability to recover quickly from difficulties.
- regulatory (adjective): Relating to or making regulations.
- defend (verb): To protect against an attack or challenge.
- institutional (adjective): Related to or characteristic of an institution.
