- Robinhood plans to buy BitStamp, a crypto exchange, for $200 million.
- Robinhood defies the SEC lawsuit by planning to buy the crypto exchange Bitstamp despite facing more stringent regulations domestically in a bid to expand its crypto business internationally.
Background Check Of Crypto Exchange BitStamp
- Bitstamp, a Slovenia-based company that was founded in 2011, is one of the oldest cryptocurrency exchanges globally. It has a strong reputation and operates in more than 50 countries, with Europe as its major market.
- The exchange provides a platform for users to trade various cryptocurrencies, including Bitcoin, Ethereum etc.
- Bitstamp has consistently maintained a focus on regulatory compliance and security.
The Wednesday announcement by the bank about its acquisition using $200 million cash wasn’t surprising for many people who are familiar with these transactions.
Robinhood’s Acquisition Of Bitstamp
Robinhood Crypto’s general manager Johann Kerbrat mentioned that the acquisition of Bitstamp was a significant leap in expanding our cryptocurrency business as it is widely known across the world, this purchase would therefore be one major sign showing how much trust this company has established over time despite all odds during times when there were no good market conditions.
Even though Robinhood set sights abroad, trouble with regulators is brewing at home. A month ago, a Well Notice was sent by the Securities and Exchange Commission to the company indicating that they could be sued over a “preliminary determination” and that Robinhood had breached the securities laws.
Wells Notice vs. The SEC Lawsuit
The Wells Notice may not lead to a lawsuit by the SEC, but it represents an action regulators must take before deciding on whether or not they want to engage themselves in formal law enforcement processes. Within thirty days, the business still has an opportunity to tell the regulators why they should not enforce against it.
Dan Gallagher, Robinhood’s compliance and corporate affairs officer, said in a statement, “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.”
The company said that it has been prudent in listing tokens on its platform. It has also avoided such products as lending and staking – where people earn incentives by committing a number of their tokens to verify transactions in certain blockchains that use proof of stake as a security mechanism.
Also Read: SEC Grants Approval For Ethereum ETF But Hasn’t Cleared Them For Trading Yet
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