Robinhood to Acquire Bitstamp for $200M in Landmark Deal

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Robinhood Markets, a financial service provider, has announced its plan to acquire cryptocurrency exchange Bitstamp for approximately $200 million in cash. As per a press release, this landmark deal, the largest in Robinhood’s history, marks a significant expansion of the company’s foray into the digital asset space.

Expansion of Operations

With the acquisition of Bitstamp, one of the world’s oldest and most reputable cryptocurrency exchanges, Robinhood aims to enhance its digital asset offerings and solidify its position in the rapidly growing crypto market. Also, it put Robinhood in direct competition with prominent exchanges like Coinbase and Binance.

Bitstamp, established in 2011, has built a strong reputation for its secure and reliable trading platform. It has become a preferred exchange for many cryptocurrency traders because of its stringent regulatory compliance and robust infrastructure. By integrating Bitstamp’s technology and expertise, Robinhood intends to offer its customers a more comprehensive and secure crypto trading experience.

Meanwhile, the acquisition is expected to end in the first half of 2025. Undoubtedly, Robinhood is on an expansion spree. As reported by TheCoinRise, the trading platform acquired credit card startup X1 for a whopping $95 million. According to the company, the acquisition was important to develop a close bond with its current clients.

Robinhood Receives Investigative Subpoena

In 2023, Robinhood Markets Inc. received an investigative inquiry from the Securities and Exchange Commission (SEC). The subpoena requested information concerning certain cryptocurrencies supported on its platform, crypto preservation, and methods of its operation. Notably, the investigation was prompted by a series of bankruptcies filed by several crypto companies including the now-defunct FTX exchange in 2022.

Meanwhile, this is not the company’s first encounter with regulatory agencies. In 2020, the New York State Department of Financial Services (NYDFS) imposed a fine of $30 million on Robinhood Crypto, for allegedly breaking consumer protection, cybersecurity, and anti-money laundering laws.

Robinhood Q1 Performance

Amidst the regulatory concerns, Robinhood’s quarter-one performance exceeded industry expectations, with reported revenue of $618 million, beating a $534.5 million estimate by investment research firm Zacks by 15.6%. This positive outcome and increased trading volume led to a surge in Robinhood’s shares, rallying 7.3% to $19.15 in after-hours trading.

Although the share price slightly reduced to $18.55, Robinhood’s stock saw a 44.3% increase year-to-date. Likewise, the company reported custody of $26.2 billion worth of crypto for users, marking a substantial 78% rise from the previous.

 

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