Regulation
Robinhood Got Much More Than Crypto Investors in Its $200 Million Acquisition of Bitstamp – DL News
- Robinhood purchased a crypto platform with 50 licenses and registrations.
- One potential approval is the European Union MiCA license.
- The agreement highlights the importance of regulatory approvals.
Robinhood’s $200 million acquisition of Bitstamp last week won’t just bring American crypto online brokerage investors from around the world. It also comes with a potential bonus prize: a MiCA license.
The European Union is in the process of implementing a bloc-wide crypto regulatory regime called Crypto-Asset Markets Regulation, or MiCA.
While many companies are undertaking painstaking efforts to comply with the landmark law, Robinhood could beat them all by simply purchasing an already qualified company.
“It has to be interesting for any American company to have part of its platform in Europe, just from a risk diversification point of view,” James Sullivan, Bitstamp’s general counsel, said at an event in Paris on digital currency that the company co-hosted on Tuesday.
Governance requirements
The deal comes as crypto companies operating in the EU will have to comply with stricter capital and governance requirements from the end of the year.
Once a company obtains its license in a chosen EU country, it can expand its services across the entire 27-country bloc.
“They [Robinhood] “We hope to acquire Bitstamp with a MiCA license,” Sullivan said.
“This is our strategy for 2024 and if all goes well we will be their MiCA approved entity.”
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Indeed, in announcing its deal, Robinhood highlighted the value of regulatory approvals.
“Bitstamp holds over 50 active licenses and registrations globally and will attract customers from the EU, UK, US and Asia to Robinhood,” the brokerage said.
The deal is expected to close in 2025.
The European Union was the first major jurisdiction to adopt comprehensive, tailored laws for crypto platforms.
“Europe, as a market, has taken the lead in adopting a regulatory regime, which I think many other regulators will follow,” Sullivan said, five days after Robinhood announced the news of the acquisition projects.
Legal battles
The U.S. government, in contrast, has made little progress in agreeing on how to regulate the new digital asset class. As a result, some of the biggest companies are embroiled in legal battles over whether or not crypto is considered a security.
Yet crypto has become a hot topic in the run-up to the US presidential election in November. Former President Donald Trump, the presumptive Republican Party nominee, has promised to prioritize crypto users.
But it is unclear whether this would lead to changes in the regulations.
“There is a scenario where nothing changes for a period of time,” Sullivan said.
“The U.S. is obviously a very important market, but Europe is interesting because it’s more structured,” Sullivan said, adding that market uncertainty comes from a lack of regulation.
Johann Kerbrat, CEO of Robinhood Crypto, previously said DL News that Robinhood wants to continue to expand beyond the United States, including into European and Asian markets.
“The goal is to continue pushing on the international stage,” Kerbrat said.
Inbar Preiss is DL News’ Correspondent in Brussels. Contact the author at inbar@dlnews.com.