Robinhood is making a second coin to expand into the UK
Nearly two years after the stock trading app indefinitely postponed its launch in the country, the company announced tuesday it would acquire Ziglu, a UK-based crypto and payments company. The terms of the contract are not disclosed.
“Ziglu and Robinhood share a common set of goals, working to lower barriers to entry for a new generation of investors, and we are excited to continue this mission together,” Ziglu CEO Mark Hipperson said in a statement. a statement included in a Tuesday post on the Robinhood blog.
Hipperson is no stranger to the challenger banking space. He was one of the founders and the first Chief Technology Officer of London-based Starling.
Ziglu allows UK-based customers to buy and sell 11 cryptocurrencies, earn yield through its Boost products, pay with a debit card, and transfer money across borders with no fees , according to Tuesday’s post.
Robinhood said it wanted to use the purchase to open its crypto platform to international customers and accelerate its expansion across Europe.
“Along with the Ziglu team, we will work to leverage the best of both companies, exploring new ways to innovate and break down barriers for customers across the UK and Europe,” the company said on Tuesday. Robinhood CEO Vlad Tenev.
In Ziglu, Robinhood buys a crypto outlet that has already gained approval from the UK’s Financial Conduct Authority (FCA), a relative rarity. Only 33 of the more than 100 crypto companies that have applied since the start of last year have been given the green light by the FCA, the FinancialTimes reported, and the regulator suspended work on new applications to draw attention to a backlog.
Robinhood has regularly clashed with regulators in the United States. It paid nearly $70 million to the Financial Industry Regulatory Authority (FINRA) last year to settle allegations that it misled customers, approved ineligible traders for risky types of trades and failed to not adequately oversee the technology which left customers stranded. off the platform during periods of high demand.
It also agreed to pay $65 million to the Securities and Exchange Commission (SEC) at the end of 2020 to settle charges of failing to disclose the role of order flow payment in its process. Massachusetts securities regulators filed a lawsuit against the company the same week, citing “aggressive tactics to attract inexperienced investors, its use of gamification strategies to manipulate customers, and its failure to prevent frequent outages and disruptions.” on its trading platform”. The company has since ditched the confetti displays that once accompanied user achievements, such as early trades.
Despite the bruising to its reputation, it brought in 3 million new customers in the quarter the COVID-19 pandemic began and saw such a surge in business during the meme-stocking frenzy of early 2021 that he had to temporarily restrict trade and demand billions from his shareholders. of dollars, which he pledged to the stock market clearinghouse as collateral.
Robinhood filed an initial public offering in July 2021, but its stock price has lost 71% of its value since then. according to Bloomberg.
The company had planned to make its app available to UK users by the end of 2020, but closed a waitlist in July that had attracted around 250,000 signups over eight months.
“We have come to recognize that our efforts are currently better spent strengthening our core US business and making new investments in our foundational systems,” the company wrote to potential UK customers in an email. ‘era.
Robinhood withdrew its bank charter application from the Office of the Comptroller of the Currency (OCC) in December 2019.