Markets
Robinhood Buys Bitstamp to Expand Cryptocurrency and International Business
Key points
- Online trading platform Robinhood has agreed to buy European cryptocurrency exchange Bitstamp for around $200 million.
- The deal will help grow Robinhood’s cryptocurrency business, which has surged in recent quarters, especially in a number of international markets where Bitstamp operates.
- The expansion comes as Robinhood’s existing cryptocurrency business has attracted the attention of regulators, with the SEC issuing the company a Wells Notice last month, indicating potential enforcement actions.
Robinhood Markets online trading platform (HOOD) has agreed to buy European cryptocurrency exchange Bitstamp for about $200 million, in a deal that will expand Robinhood’s cryptocurrency and international business, according to a statement released Thursday.
“The acquisition of a global exchange will significantly accelerate Robinhood Crypto’s expansion around the world,” Robinhood said, noting that Bitstamp has over 50 active licenses and registrations worldwide and will bring customers from across Europe and Asia together with the United States on its platform.
Robinhood’s growth in cryptocurrencies and international business
The deal will also help grow Robinhood’s presence outside the United States his Robinhood Crypto business. The company has also recently moved to expand products such as credit cardsand offering his app in the UK.
The cryptocurrency business has boosted Robinhood’s earnings in recent quarters, with the company reporting last month that revenue from its cryptocurrency business more than tripled in the first quarter from a year earlier to $126 million.
“The acquisition of Bitstamp is an important step in the growth of our cryptocurrency business,” said Johann Kerbrat, CEO of Robinhood Crypto, adding that “Bitstamp’s long-standing and highly trusted global exchange has shown resilience through market cycles.”
However, Robinhood’s cryptocurrency business has attracted the attention of regulators Robinhood said it received A Wells Notice from the Securities and Exchange Commission (SEC) last month, indicating that the regulator concluded an investigation that could lead to enforcement action.
Robinhood said it expects the Bitstamp acquisition to be completed by the first half of next year, pending regulatory approval.
Robinhood shares jumped more than 5% to $22.70 as of 10:40 a.m. ET Thursday following the news, contributing to their 78% gain since the beginning of the year.