Robinhood Plans to Offer Crypto Institutional Trading in the US by Acquiring Bitstamp Exchange

Robinhood Plans to Offer Crypto Institutional Trading in the US by Acquiring Bitstamp Exchange

Robinhood has finalized a $200 million deal with Bitstamp. The firm is currently in the middle of dealing with a Wells notice from the Securities and Exchange Commission last month.

However, the trading platform has decided to go ahead with the acquisition plans. After the purchase, Robinhood will allow institutional investors in the United States to use the Bitstamp app for investments.

Users Demand Additional Crypto Products from Robinhood

However, the deal in question requires regulatory approval and may be finalized by 2025. The General Manager of Robinhood, Johann Kerbrat, noted that the decision was a result of various demands among users for additional digital asset products.

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Speaking with the WSJ, he noticed that during the last few years, the digital trading platform has focused its attention on expanding the local digital asset offerings keeping in view the considerable demand.

Vlad Tenev, Robinhood CEO and co-founder, told the media that the Bitstamp acquisition will assist the platform in granting a fundamental reorganization of the platform. He posted on social media that the firm is working on joining forces with Bitstamp as a way to augment its spot trading services, institutional lending, and staking options.

Robinhood to Face Legal Troubles

Robinhood has continued operations as normal; however, the platform is still faced with the potential lawsuit. The platform received a Wells notice from SEC on 4th May, 2024 making news about a federal investigation official.

The notice has revealed that SEC officials are looking into the crypto services offered by the digital trading platform.

On this account, the agency has deemed it suitable to undertake an enforcement action about the alleged security violation. As per Dan Gallagher, the chief legal officer at Robinhood the platform is facing legal action regardless of years of attempts to cooperate with the SEC.

However, it is important to note that the Wells notice does not ensure that SEC will sue the platform.

At the same time, Robinhood has retained that the platform will continue to cooperate with the regulatory agency in order to avoid potential violations. However, the platform has continued to maintain a calm and organized business demeanor in the face of upcoming challenges.

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On the same note, Robinhood recently rolled out API support for its consumers based in the United States. As per Kerbrat, the API will assist developers in designing customized tools for cryptocurrency trading.

Robinhood Investors Can Now Access Trading Data through API

The digital trading platform introduced an API in May to allow seasoned crypto investors to access useful trading data. Developers and technical investors can utilize this API to make an automated trading strategy.

Robinhood has noticed that the new service will allow investors to stay ahead of the latest trends and respond to market movements with better efficiency.

Furthermore, this API allows investors to conduct trading without opening the Robinhood application. The firm has stated that investors can utilize algorithms and different strategies to conduct crypto trading.

The VP further added that API will assist investors in executing trades based on predetermined factors which enables automated trading support.

The automated trades are faster, more effective, and have greater efficiency. The platform further added that these tools are highly useful but they are not suited for all investors.

Kerbrat noticed that effective implementation of this API requires users to have technical knowledge and the ability to navigate through complex trading strategies.

He further explained that investors can avail important facilities such as analytics, real-time data processing, and better security. The platform stated that users can visit a dedicated website to access technical support and API documentation.

Speaking on the advantages of the API, Kerbrat stated that it saves investors a considerable of trading costs while maximizing the total number of offers. Additionally, Robinhood has also launched staking services for Solana. However, the new feature is only available for European customers.

On 15th May, the platform debuts its first digital asset staking product. Account holders can now earn up to 5% yield on the Robinhood app by staking their SOL tokens.

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Author: Isacco Genovesi

Isacco writes news articles, reviews and guides about cryptocurrencies including technical analysis, blockchain events, coin prices marketcap and detailed reviews on crypto exchanges and trading platforms.

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