Regulation
Robinhood Got Much More Than Crypto Investors in $200 Million Bitstamp Acquisition – DL News
- Robinhood purchased the 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 US online brokerage cryptocurrency investors around the world. It also comes with a potential bonus prize: a MiCA license.
The European Union is in the process of implementing a block-level cryptocurrency regulatory regime called Markets in Crypto-Assets Regulation, or MiCA.
While numerous businesses are undertaking the painstaking effort to comply with the basic law, Robinhood could outdo them all simply by purchasing a company that already qualifies.
“It has to be interesting for any U.S. company to have part of their platform in Europe, just from a risk diversification perspective,” James Sullivan, general counsel at Bitstamp, said at a Paris event on digital money organized by the company on Tuesday.
Governance requirements
The deal comes as cryptocurrency companies operating in the EU will have to comply with tougher capital and governance requirements from the end of the year.
Once a company obtains a license from a chosen EU country, it can move its services across the 27-nation bloc.
“They [Robinhood] they hope to acquire Bitstamp with a MiCA license,” Sullivan said.
“This is our strategy for 2024 and hopefully we will be their MiCA authorized entity.”
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In fact, in announcing the deal, Robinhood highlighted the value of regulatory approvals.
“Bitstamp holds over 50 active licenses and registrations globally and will bring customers across 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 pass comprehensive and tailored laws for crypto platforms.
“Europe as a market has been at the forefront of adopting a regulatory regime, which I think many other regulators will follow,” Sullivan said, five days after Robinhood broke the news of the acquisition plans.
Legal battles
The US government, on the other hand, has made little progress in reaching an agreement on how to regulate the new digital asset class. As a result, some of the largest companies are embroiled in legal battles over whether cryptocurrencies should be classified as securities.
However, cryptocurrencies have become a hot issue ahead of the US presidential elections in November. Former President Donald Trump, the presumptive nominee of the Republican Party, has promised to prioritize cryptocurrency users.
But it is not known whether this would lead to changes in regulation.
“There’s a scenario where nothing changes for some time,” Sullivan said.
“The U.S. is obviously a very important market, but Europe is interesting because it is more organized,” Sullivan said, adding that market uncertainty stems from a lack of regulation.
Johann Kerbrat, previously CEO of Robinhood Crypto said DL News that Robinhood wants to continue expanding beyond the United States, including European and Asian markets.
“The goal is to continue pushing internationally,” Kerbrat said.
Inbar Preiss is DL News’ Correspondent from Brussels. Contact the author at inbar@dlnews.com.