Exclusive Interview with Robinhood Crypto General Manager: The acquisition of Bitstamp is to expand the global market and also a response to the regulatory environment in the United States

Written by: Sage D. Young, Unchained

Compiled by Yangz, Techub News

As a financial platform with 10.9 million monthly active users and a $17.2 billion on-chain investment portfolio, Robinhood deserves the title of “cryptocurrency giant.” Yesterday, Robinhood announced its acquisition of the cryptocurrency exchange Bitstamp for a final transaction price of $200 million in cash, expanding its global presence beyond the United States. Robinhood stated that the acquisition is expected to be completed in the first half of 2025, subject to customary closing conditions, including regulatory approval. Currently, the two parties have reached an acquisition agreement. Barclays Capital will serve as the exclusive financial advisor to Robinhood, and Galaxy Digital Partners will serve as the exclusive financial advisor to Bitstamp.

Robinhood stated that Bitstamp was established in 2011 and has offices in Luxembourg, the UK, Slovenia, Singapore, and the United States. According to CoinGecko, Bitstamp’s 24-hour trading volume reached 2.344 billion US dollars.

To better understand this acquisition, Unchained interviewed Johann Kerbrat, General Manager of Robinhood Crypto. In addition to introducing the acquisition, Kerbrat also shared his outlook on the current cryptocurrency landscape, including the relationship between the Securities and Exchange Commission (SEC) and cryptocurrency projects, the uncertain political landscape in the United States, and the reasons why Robinhood refuses to list tokens.

The following are the key points of the interview:

• After six months, what would be the best scenario for Robinhood’s acquisition of Bitstamp?
• Why did Robinhood and Uniswap Labs both receive Wells notices from the SEC?
• Why is it said that “the lack of regulatory clarity in the United States is one of the main reasons for our entry into the European Union”?
• Whether decentralization is a consideration for Robinhood in listing tokens.

Question: First, please introduce yourself.

Answer: I have been working at Robinhood Crypto for over three years, initially joining as the Chief Technology Officer. I have been an engineer all my life, but as early as 2010, when everyone was still pondering ‘why do we need cryptocurrency,’ ‘why do we need Bitcoin,’ and ‘what is Bitcoin,’ I joined a cryptocurrency company. Looking at it now, Bitcoin is no longer a ‘question,’ institutional players on Wall Street are buying Bitcoin through ETFs on a daily basis. We will see more real-world use cases with active users in the United States and other countries.

Q: How long did the acquisition take to prepare for this time?

Answer: Cryptocurrency and blockchain will continue to exist as the foundation of the future financial world. Currently, we have been exploring potential methods to accelerate business development and looking for potential mergers or ways to collaborate with other companies in this field.

I can’t tell you how long we’ve been preparing, but we’re very excited about this deal. This acquisition will help with the international expansion of cryptocurrency and introduce Robinhood’s first international business, which is a great move for the company.

Q: How do you think Robinhood’s business in the EU will develop after the acquisition?

A: In general, we hope to expand our potential market, and the EU market is very good. The acquisition of Bitstamp does help to expand our market size, because they have valid licenses and registrations in more than 50 countries or regions around the world. They can bring us customers from the EU, UK, US, and even some parts of Asia.

Q: From your perspective, what would be the best scenario six months after the acquisition?

A: To be honest, this transaction has just been announced, and it will take some time before it is truly completed. We expect to complete all processes by the first half of 2025, so the best case scenario is for the transaction to be successfully completed and approved by regulatory authorities.

Question: What do regulatory agencies need to do and can you provide more information about the current trading situation? When you mentioned ‘regulatory agencies’, are you referring to regulatory agencies in the United States, the European Union, or both?

Yes, both exist. Therefore, the completion of the transaction needs to be adjusted according to the actual situation, including regulatory approvals from several different regulatory agencies. In this regard, Robinhood’s previous experience of cooperation with regulatory agencies such as the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the New York Department of Financial Services (DFS) will be helpful, and we now have relevant experience in the UK and the EU. So overall, we don’t expect any major obstacles.

Question: Uniswap responded to Veer’s notice on May 21st. Did you gain anything from their response?

A: We can sympathize with Uniswap Labs. We recently received a similar notice from Wells. For me, the main takeaway is that U.S. regulators need to clarify what is considered a security and what is considered a cryptocurrency. We strongly disagree with the view that any asset we offer on the platform is a security. We have strict procedures, including security analysis, for listing any token or asset on our platform.

In the past, we have been making efforts to communicate with the US SEC. As of this interview, we have met with them 16 times, trying to register, at this point, we are extremely disappointed with their response, and only hope that they can clarify this as soon as possible.

**Q: After meeting with the SEC multiple times, were you surprised by Robinhood’s receipt of the Wells notice?

Answer: Of course, we are very disappointed. We have always been proactive and tried to register when the SEC chairman publicly stated that cryptocurrency companies should register.

Q: Given the current political landscape of cryptocurrencies (the SEC’s actions on the Ethereum spot ETF have generated optimism, but several cryptocurrency companies have also received Wells notices, and the regulatory framework in the United States is still unclear), do you or Robinhood have any plans for regulatory action?

A: The Financial Innovation and Technology Act of the 21st Century (FIT21) is a good step forward. It provides us with clarity in regulation and a framework to follow. Robinhood, as both a broker and a crypto platform, is regulated by the US Financial Industry Regulatory Authority, the Securities and Exchange Commission, and the New York Department of Financial Services. We know how to interact and collaborate with regulatory agencies. If we still can’t get clear regulation at this point, there is clearly a problem. Hopefully, we can see results from this bill and continue to move forward. However, it should be noted that the lack of regulatory clarity in the United States is one of the main reasons we choose to expand to the EU market. In January 2025, the EU will introduce a clear regulatory framework, MiCA, and I am surprised that the US is lagging behind the EU in adopting a clear crypto framework.

Question: Can you point out specific differences between the current regulatory ecosystem in the United States and foreign countries?

Answer: In fact, just the regulation of cryptocurrencies is very different. For example, our SEC chairman said that cryptocurrency companies need to register with the SEC. And we have been trying to register, but have not been successful. Even if we succeed in registering, there will be issues related to asset issuers.

At this point, the problem is that only considering the millions of U.S. customers with cryptocurrency exposure, but they cannot clearly understand the regulatory regulations. We take a security-first approach, listing only 15 assets on the platform and never offering staking services. But the existing dilemma is that you can choose to be safe, but still receive the Wells notice from the U.S. SEC; you can also choose to be aggressive, but problems will still arise.

Q: What is the most common reason for Robinhood to refuse to list tokens on the platform?

Answer: It depends on the specific situation, including whether it is decentralized, etc. If it is a PoW chain, considerations include whether there is sufficient decentralized mining capacity to ensure that the chain does not experience rug pull-like situations. If it is a PoS chain, considerations include whether there are enough validators or if the validator group is sufficiently decentralized.

In addition, there are operational factors, such as whether the token has sufficient liquidity. Do we have enough methods to support the assets? Do we have enough market makers and liquidity providers to support it? So, there are many reasons. I don’t think any reason is more important than the other. We hope to take a safety-first approach.

Q: What do you think the approval of the US SEC for Ethereum spot ETH means for the rest of the world?

Answer: I don’t know if this approval will have much significance. But considering the fact that in the past people didn’t really expect regulatory clarity from the United States, the approval of the Ethereum spot ETF this time can allow more institutions to participate and make the cryptocurrency ecosystem more substantial.

Question: From a professional or personal perspective, which blockchain networks/protocols are you currently active in?

Answer: Personally (not investment advice), I have been actively researching almost every new blockchain to truly understand what they bring, why they are unique, and what kind of applications are built on-chain.

Lately, the chain I’ve been active on is Base. For me, it’s crucial to understand some applications on Base, such as Friend.Tech, and see how people are using it, to know where we need to do more work.

Recently, our cooperation with Arbitrum has also been very active. One or two months ago, we announced the partnership, which made us excited.

**Question: Robinhood’s user base is quite diverse, but among the holders of cryptocurrencies, who are the most loyal and sticky users?

A: 50% of Robinhood investors are new investors, so they may not have had a brokerage account before. Our customer base is also very diverse, with many being millennials and Gen Z. For me, this is the most exciting thing. It really opens the door and narrows the wealth gap between generations.

In the cryptocurrency space, we see a very diverse group. Some users are very active traders, buying and selling large amounts on the platform every day or even every hour, while some users are older and buy and hold for many years. My challenge is to meet the needs of all of them and create features that are applicable to all of them.