Robinhood Acquires Crypto Exchange Bitstamp for $200 Million

Robinhood's $200 Million Move: Bitstamp Acquisition

Robinhood Markets is set to acquire Bitstamp, a prominent cryptocurrency exchange, for $200 million in cash. This acquisition, the largest in Robinhood’s history, is aimed at expanding its cryptocurrency portfolio. Expected to finalize in early 2025, the deal is contingent on regulatory approvals and customary closing conditions.

Robinhood plans to enhance its global reach by leveraging Bitstamp’s strong market positions in Europe and Asia. This move aims to attract institutional clients through Bitstamp’s offerings, including its white label solution, institutional lending, and staking services, which will be integrated into Robinhood’s ecosystem.

Founded in 2011, Bitstamp is one of the oldest and most reputable cryptocurrency exchanges, offering over 85 tradable assets. With more than 50 active licenses and registrations worldwide, Bitstamp is known for its regulatory compliance and resilience through market cycles, trusted by retail and institutional investors alike.

Johann Kerbrat, General Manager of Robinhood Crypto, emphasized the acquisition as a significant step in expanding Robinhood’s crypto business, highlighting the synergy of customer experience and safety across regions. Bitstamp CEO JB Graftieaux noted the enhanced trading experience and the continued commitment to compliance and security that the merger promises.

Recently, Robinhood Crypto received a Wells Notice from the SEC, indicating potential enforcement action for alleged securities law violations. However, Robinhood’s Chief Legal Officer, Dan Gallagher, expressed confidence in the legality of their platform’s listed assets, dismissing the SEC’s case as weak. Despite regulatory hurdles, Robinhood’s crypto revenue surged to $618 million, marking a 40% year-over-year increase.

Barclays Capital Inc. and Galaxy Digital Partners LLC acted as exclusive financial advisors for Robinhood and Bitstamp, respectively, during the transaction. The acquisition is poised to significantly accelerate Robinhood’s global expansion, broadening its service offerings and positioning it as a full-fledged financial services provider, competing with industry giants like Coinbase and Binance.

Industry reactions have hailed the acquisition as a bold strategy by Robinhood to cement its presence in the crypto market amidst regulatory scrutiny. This move highlights the growing convergence of traditional financial services and the cryptocurrency sector, as established platforms seek to diversify their offerings and user base.