Retail giant Robinhood is acquiring crypto exchange Bitstamp for hundreds of millions of dollars, despite receiving a Wells Notice from the US Securities and Exchange Commission (SEC) earlier this year.
According to a new press release, Robinhood has agreed to acquire Bitstamp, a prominent crypto exchange platform founded in 2011 that holds more than 50 active licenses and registrations worldwide, for $200 million.
As Johann Kerbrat, Robinhood’s general manager of crypto, says:
“The acquisition of Bitstamp is an important step in the growth of our crypto activities. Bitstamp’s highly trusted and long-standing global exchange has shown resilience through market cycles.
By seamlessly linking customer experience with security across all geographies, the Bitstamp team has built one of the strongest reputations among private and institutional crypto investors.
Through this strategic combination, we are better positioned to expand our footprint outside the US and welcome institutional clients to Robinhood.”
However, according to the press release, the deal is still pending as it requires regulatory approval and is expected to close sometime in the first half of next year.
In May, the SEC issued Robinhood a Wells Notice, or a warning that they plan to take legal enforcement action against them. Dan Gallagher, chief legal, compliance, and corporate affairs officer at Robinhood Markets, Inc., said at the time that Robinhood does not sell assets that are considered securities.
“We strongly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to clarify how weak a case against Robinhood Crypto would be, both in terms of facts as of law.”
According to Robinhood CEO Vlad Tenev, the SEC has the power to change the rules, but simply doesn’t and would rather regulate through enforcement.
“The SEC has the ability to change the rules to allow brokers to house crypto assets, and they appear to have no intention of doing so. They are more likely to regulate through enforcement and that is disappointing.”
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Featured image: Shutterstock/Warm_Tail