Author: Manya Saini
(Reuters) – Trading platform Robinhood (NASDAQ:) Markets said on Thursday it has agreed to buy crypto exchange Bitstamp for about $200 million in cash, accelerating wider penetration of digital assets with its biggest deal yet.
Robinhood, which rose 3.4% yesterday, is looking to expand its product offerings to become a full-fledged financial services provider.
The acquisition of Bitstamp, which was founded in 2011 and has 50 active licenses and registrations worldwide, puts Robinhood in direct competition with industry giants Binance and Coinbase (NASDAQ:).
Major spot exchange Bitstamp, popular in Europe and Asia, has over 85 tradable assets and the deal is expected to boost Robinhood Crypto’s growth.
“We are in our early days in the EU and are excited to continue to expand there and beyond. The acquisition of Bitstamp will accelerate our global expansion,” Johann Kerbrath, vice president and general manager of Robinhood Crypto, told Reuters.
The deal, expected to be completed in the first half of 2025, comes at a time when Robinhood’s crypto business is experiencing rapid growth but also faces regulatory hurdles in the United States.
Kerbrat said the company intends to continue communicating with regulators as it moves forward.
Robinhood’s cryptocurrency business was the driving force behind its huge first-quarter earnings growth in May, but that same week the company also said it had received a so-called Wells Notice from the U.S. Securities and Exchange Commission regarding tokens traded on its platform.
The notice is issued when the regulator plans to take enforcement action against the company.
The market regulator argues that crypto tokens should be considered securities and subject to the rules for their registration. Crypto firms, on the other hand, have accused the SEC of abuses.
Robinhood shares are up 69% this year after the company said it plans to focus on “profitable growth.” Analysts expect it to target more growth amid a retail revival and increased adoption of cryptocurrencies.
Barclays Capital and Galaxy Digital were the exclusive financial advisors to Robinhood and Bitstamp, respectively.