Retail trading giant Robinhood is acquiring crypto exchange Bitstamp for hundreds of millions of dollars despite receiving a Wells Notice by the U.S. Securities and Exchange Commission (SEC) earlier this year.
According to a new press release, Robinhood has agreed to purchase Bitstamp, a prominent crypto exchange platform founded in 2011 that holds over 50 active licenses and registrations globally, for $200 million.
As stated by Johann Kerbrat, Robinhood’s general manager of crypto,
“The acquisition of Bitstamp is a major step in growing our crypto business. Bitstamp’s highly trusted and long standing global exchange has shown resilience through market cycles.
By seamlessly coupling customer experience with safety across geographies, the Bitstamp team has established one of the strongest reputations across retail and institutional crypto investors.
Through this strategic combination, we are better positioned to expand our footprint outside of the US and welcome institutional customers to Robinhood.”
However, according to the press release, the deal is still pending because it requires regulatory approval and is expected to be completed sometime during the first half of next year.
In May, the SEC issued Robinhood a Wells Notice, or a warning that they plan on taking legal enforcement action against them. At the time, Dan Gallagher, chief legal, compliance, and corporate affairs officer at Robinhood Markets, Inc., said that Robinhood does not sell any assets that are considered securities.
“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
According to Robinhood CEO Vlad Tenev, the SEC has the power to alter the rules but simply doesn’t and would instead rather regulate via enforcement.
“The SEC has the ability to change the rules to allow for brokers to accommodate crypto assets and they do not seem intent on doing that. Rather they are proceeding with regulation by enforcement and that is disappointing.”
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