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Breaking: Robinhood Buys Back $605.7 Million Stake from Sam Bankman-Fried in U.S. Government Deal

by Blockchain NewsSeptember 1, 2023

Robinhood Markets Inc. has finalized a share repurchase agreement worth $605.7 million with the United States Marshal Service, according to a company announcement made earlier today and CNBC report. The deal involves the acquisition of 55.3 million shares at $10.96 each, previously owned by Sam Bankman-Fried’s Emergent Fidelity Technologies. The transaction has received approval from the U.S. District Court for the Southern District of New York

Financial Implications

The $605.7 million deal represents a significant financial move for Robinhood, which had initially disclosed its intention to repurchase the stake in February of this year. The company’s board had authorized the pursuit of purchasing most or all of the stock at that time.

Market Response

Following the announcement, Robinhood’s stock (HOOD) experienced a 3.31% increase, closing at +0.36. This suggests that the market has largely responded positively to the news, although it remains to be seen how this will affect the company’s long-term valuation.

Legal Context

The approval from the U.S. District Court for the Southern District of New York adds a layer of legal validation to the transaction. It also closes a chapter on the involvement of Bankman-Fried’s Emergent Fidelity Technologies with Robinhood, following the former’s bankruptcy protection filing last year.

Background

In May 2022, Bankman-Fried had acquired a 7.6% stake in Robinhood, amounting to over 56 million shares valued at nearly $482 million.

According to a Reuters report dated January 4, 2023, U.S. officials were in the process of seizing more than $400 million worth of Robinhood shares linked to FTX.

Then the shares in question were seized and transferred to the U.S. government’s custody following the bankruptcy protection filing by Bankman-Fried’s FTX and Emergent Fidelity Technologies last year.

Robinhood’s board had approved a plan to repurchase the stake, as confirmed in their fourth-quarter report published on February 8, 2023.

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eToro and Robinhood Modify U.S. Cryptocurrency Offerings Amidst Regulatory Changes

by Blockchain NewsJune 13, 2023

The global cryptocurrency landscape is witnessing significant shifts, with leading trading platforms, eToro and Robinhood, adjusting their U.S. cryptocurrency offerings. Both platforms are responding to the rapidly evolving regulatory environment in the United States, affecting popular cryptocurrencies such as Algorand (ALGO), Decentraland (MANA), Dash (DASH), Polygon (MATIC), Solana (SOL), and Cardano (ADA).

Starting at 6:00 AM ET, Wednesday, July 12, 2023, eToro U.S. customers will not be able to open new positions in Algorand, Decentraland, Dash, and Polygon. Despite the changes, users will still have the ability to hold and sell existing positions in these cryptocurrencies.

Just a month earlier, on June 9, Robinhood also made headlines when it announced the delisting of Solana, Cardano, and Polygon. This follows recent charges by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase, alleging that these platforms traded unregistered securities. Given these circumstances, analysts predict a further decline in cryptocurrency trading activity on Robinhood.

Both eToro and Robinhood’s decisions highlight the complex nature of global cryptocurrency regulations and the need for platforms to adapt swiftly to protect user interests and ensure compliance. The trading platforms’ strategic shifts are significant for users seeking updates on cryptocurrency strategies amidst a dynamic U.S. regulatory environment.

Despite the changes, eToro remains committed to promoting a diverse range of asset classes, including stocks, Exchange Traded Funds (ETFs), and options, reinforcing their support for crypto assets. The company also pledges to work closely with regulators around the world to shape the future of the crypto industry and advocate for access for everyday investors.

This news reaffirms the unique challenges cryptocurrency platforms face while navigating regulations. Changes to crypto offerings, especially in the U.S., are provoking discussions about the future of crypto regulation. As the regulatory landscape continues to evolve, investors and users will be closely monitoring platforms like eToro and Robinhood for further updates.

eToro encourages customers with queries about these changes to contact its customer service team. Meanwhile, industry watchers anticipate more platforms to realign their strategies in response to changing regulations, impacting the availability and trading of various cryptocurrencies.

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Tagged : ALGORAND (ALGO) / Cardano Ada / CRYPTOCURRENCY OFFERINGS / DASH (DASH) / Decentraland (Mana) / Etoro / News / Polygon (Matic) / Robinhood / SOLANA (SOL) / U.S. REGULATIONS

Equities Up, Crypto Down: Robinhood’s May 2023 Trading Data and Upcoming Crypto Delisting

by Blockchain NewsJune 12, 2023

Robinhood Markets Inc., the popular trading platform known for democratizing investing, has released its operating data for May 2023, showing an increase in both equity and options trading but a decline in cryptocurrency trading.

In May, Robinhood’s Net Cumulative Funded Accounts (NCFA) reached 23.1 million, a growth of around 20,000 from the previous month. This figure, however, only represents unique users, as it does not count existing customers who have opened multiple accounts.

Despite the increase in the number of funded accounts, Robinhood reported a drop in Monthly Active Users (MAU), which fell by roughly 900,000 from April to May 2023, bringing the total to 10.6 million.

The trading platform experienced an uptick in Assets Under Custody (AUC), with a 6% increase from April to $81.8 billion by the end of May. Net deposits for the month of May totaled $1.6 billion, an annualized growth rate of 25% compared to April’s AUC. Over the past year, net deposits have reached $16.5 billion, reflecting an annual growth rate of 22% relative to May 2022 AUC.

However, when it comes to trading volumes, Robinhood’s report showed contrasting trends. While equity notional trading volumes rose 27% to $49.4 billion, and options contracts traded increased 29% to 97.5 million, cryptocurrency trading went down. Crypto notional trading volumes decreased significantly by 43% to $2.1 billion, reflecting a relative decline in the enthusiasm for cryptocurrency trading among Robinhood’s user base in May.

The company’s margin balances remained stable at $3.1 billion, showing no change from April 2023. Cash sweep balances, on the other hand, showed a marked increase, growing 16% from the end of April to $11.2 billion by the end of May.

The report provides insights into Robinhood’s performance in a volatile market environment, indicating the shifting preferences of its users. The contrasting trend in equities and options versus cryptocurrency trading may reflect changing investor sentiment in the evolving landscape of financial markets.

Adding to these dynamics that could significantly impact future trading volumes, Robinhood announced the delisting of cryptocurrencies Solana (SOL), Cardano (ADA), and Polygon (MATIC). This decision follows recent charges by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase, alleging that these platforms traded unregistered securities. Given these circumstances, a further decline in cryptocurrency trading activity on Robinhood can be expected.

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Tagged : $Sol / ADA / Bitcoin / Crypto / Matic / News / Robinhood

Robinhood Receives Investigative Subpoena from SEC Over Crypto Business

by Blockchain NewsMarch 5, 2023

Robinhood Markets, the popular brokerage known for its commission-free trading, has recently disclosed that it received an investigative subpoena from the United States Securities Exchange Commission (SEC) in December 2022. The subpoena was related to its cryptocurrency listings, custody services, and platform operations. This came after several major cryptocurrency trading venues and lending platforms filed for bankruptcy earlier in the year, including FTX, Three Arrows Capital, Voyager Digital Holdings, and Celsius Network. The SEC’s inquiry into Robinhood’s crypto business is aimed at obtaining information necessary to decide whether to pursue legal action against the company.

This is not the first time Robinhood has been under scrutiny for its crypto business. In April 2021, the California Attorney General’s Office issued subpoenas seeking information about Robinhood’s crypto trading platform, business and operations, custody of customer assets, and coin listings. In August 2021, the New York District of Financial Services fined Robinhood’s crypto division $30 million for failing to invest the proper resources and attention to develop and maintain a culture of compliance. Additionally, the Massachusetts Securities Division scrutinized Robinhood in August 2021 for allegedly targeting inexperienced investors.

The investigative subpoena from the SEC highlights the regulatory challenges faced by the crypto industry, as regulators seek to clamp down on fraud and protect investors. The SEC has been increasingly active in pursuing companies that violate securities laws in the crypto industry. For example, in December 2021, the SEC filed a lawsuit against Ripple Labs, alleging that its XRP token was an unregistered security.

Robinhood’s crypto business has been growing rapidly, and the company has added several new cryptocurrencies to its platform in recent years. However, the regulatory scrutiny and fines imposed on the company have raised concerns about the company’s compliance culture and its ability to navigate the regulatory landscape. The company has stated that it is committed to complying with all applicable laws and regulations and is working to improve its compliance infrastructure.

In conclusion, the recent investigative subpoena from the SEC is a reminder of the challenges faced by the crypto industry and the importance of compliance in the sector. Robinhood’s crypto business is under scrutiny, and the company must continue to invest in compliance infrastructure to ensure that it is meeting regulatory requirements. As the crypto industry continues to evolve, regulatory scrutiny is likely to increase, and companies must be prepared to navigate this complex landscape.

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Tagged : CRYPTO LISTINGS / Custody Services / INVESTIGATIVE SUBPOENA / News / Robinhood / SEC

BlockFi Will Submit Assets And Liabilities For Bankruptcy On January 11

by Blockchain NewsJanuary 10, 2023

In a recent announcement, the cryptocurrency lending company BlockFi stated that it will provide information regarding its assets and liabilities, in addition to the payments that it received prior to its bankruptcy filing in November.

BlockFi stated that it had provided its stakeholders with a presentation in which it detailed its intentions for future court filings and provided a breakdown of the bankruptcy proceedings. BlockFi also provided a breakdown of the bankruptcy proceedings.

The lending company claims that shortly after the company’s initial bankruptcy hearing in November, it made contact with 106 potential buyers. On January 30, the company will ask the court for permission to proceed with the bidding process and will ask for approval from the court regarding the bidding process. Both of these requests will be made in relation to the bidding process.

To be more specific, the company stated that no members of the BlockFi management team had withdrawn any cryptocurrency from the platform since October 14 and that none of them had “made a withdrawal bigger than 0.2 BTC in value at any time” since August 17. This information was provided in a blog post that was published on the company’s website.

In addition, the company stated that following the acquisition of a revolving credit line for $400 million from FTX US in July, it had increased basic wages and paid retention incentives for specific personnel.

On January 11, BlockFi announced that it planned to provide a summary of its financial affairs, in addition to providing an account of its assets and liabilities.

The announcement was made after the United States Department of Justice informed the judge overseeing the bankruptcy of BlockFi that it had seized more than 55 million shares of Robinhood. At the time of publication, these shares had a value of approximately $450 million. The criminal case against the cryptocurrency exchange FTX and the executives of the company resulted in the seizure of the shares.

The next scheduled meeting for the public hearing regarding the FTX bankruptcy case is scheduled for the 11th of January. On the other hand, an all-encompassing hearing for BlockFi is scheduled for the 17th of January.

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Tagged : Bankruptcy / Blockfi / Department Of Justice / News / Robinhood

Robinhood Seeks Sanctions Investigators ahead of Self-Custody Crypto Wallet Launch

by Blockchain NewsOctober 24, 2022

Robinhood is seeking to hire several Sanctions Investigators for its finance crimes compliance unit as it may be broadening its offerings, according to its official Linkedin page.

The job description includes reviewing and analyzing alerts of potential matches of Robinhood customers to denied parties, managing the investigative process from initial detection to disposition and reporting, annotating findings providing proof of evidence and a final decision, escalating any matches that cannot be resolved to Sanctions Investigation management and in addition any accurate positive matches to the Sanctions Office.

Robinhood is a standalone wallet app that offers brokerage services and allows users to trade and swap crypto without network fees.

According to reports, the Brokerage app hiring sanctions investigators could be related to the firm’s upcoming self-custody wallets launch, which will be released officially in the coming months.

Per the job posting, the role requires two-plus years of experience working in financial crimes investigation and one-plus years investigating cryptocurrency transactions. While not required, “Chainalysis experience” is welcome.

In August, the Brokerage app firm was slammed with a fine of $30 million by the New York Department of Financial Services (NYDFS).

As reported by Blockchain.News, the sanctions came as the regulator discovered that Robinhood Crypto violated several extant regulations, including the Bank Secrecy Act (BSA), Anti-Money Laundering (AML) violations, transaction monitoring inadequacies, and failure to make provisions for cybersecurity regulation.

The regulator noted that it discovered the flaws behind the sanction in Robinhood Crypto’s operating models following a supervisory examination and a subsequent investigation.

Superintendent of Financial Services Adrienne A. Harris stated that as the Brokerage firm grew, it failed to “invest the proper resources and attention to develop and maintain a culture of compliance—a failure that resulted in significant violations of the Department’s anti-money laundering and cybersecurity regulations.”

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Tagged : Blockchain / Cryptocurrency / Enterprise / Exchange / Hiring / Robinhood / SANCTIONS INVESTIGATORS

Robinhood Lists USDC as First Stablecoin on Trading Platform

by Blockchain NewsSeptember 21, 2022

Robinhood, a US brokerage platform that makes stock trading and investing easy, on Tuesday added Circle’s USDC stablecoin to its crypto offerings for retail investors.

This move marks USD Coin (USDC) as the first stablecoin available to retail traders on the Robinhood platform. The firm stated that the offering is now available for transactions on Polygon and Ethereum networks, one of the most actively used open-source blockchains.

The inclusion of USDC on Robinhood is a strategy by the platform to set its sights abroad, where the usage of stablecoins is more popular for global users.

USDC is the second largest stablecoins by market capitalization, with a total value of $50.1 billion. Tether is the largest stablecoin whose market cap stands at $68 billion, though it has been losing ground to USDC since the collapse of Terra’s algorithmic UST stablecoin.

As a stablecoin, Robinhood investors won’t be able to net profits on USDC. However, the listing is a target for the company focusing heavily on cryptocurrency expansion.

The support of USDC will enable users to convert their existing stablecoin holdings into cash and use them to buy stocks on Robinhood. The stablecoin will also allow users to convert their cash into non-volatile cryptocurrency without the need to create a brokerage account with another company.

Robinhood launched crypto trading on its platform in 2018. Over time, the firm has been gradually adding more digital assets to its platform. Currently, there are 17 different cryptocurrencies users can trade using Robinhood’s app with the new addition of USDC stablecoin.

Robinhood Listing May Be Good for USDC

USDC stablecoin will significantly benefit from the addition of the Robinhood platform. Robinhood has a huge user demographic (15.9 million active users in 2022), and many of them are less familiar with stable cryptocurrency than popular volatile digital assets like Bitcoin, Ether, and others. The new listing will also help USDC overcome some recent crises facing the stablecoin.

Of late, USDC has been in the media spotlight, which has not been good for its expansion. Early last month, Circle, the company behind the popular dollar-pegged USDC stablecoin, froze 75,000 USDC held by users with ties to Tornado Cash. This came after the U.S. Treasury Department blacklisted the use of Tornado Cash, an open-source project that allows users to hide their transactions.

Currently, users who want to recover their locked USDC in the private transaction application (Tornado Cash) are expected to apply for an OFAC license, authorization from the Office of Foreign Assets Control (OFAC) that would enable them to do so.

Early this month, USDC has also been facing some uncertainty with the Binance crypto exchange. On September 6, Binance announced plans to convert customers’ holdings in rival stablecoins such as USDC into its own stablecoin (BUSD). The move was seen as a way in which Binance tried to scoop USDC market share in favour of its own BUSD stablecoin.

Yesterday, Binance affiliate WazirX, India’s largest cryptocurrency exchange, also announced plans to stop deposits of stablecoins USDC, USDP and TUSD and automatically convert users’ existing balances to Binance’s USD-backed stablecoin BUSD.

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Tagged : Exchanges / Robinhood / Stablecoin / TRADING PLATFORM / USDC

Robinhood to Pay Less Than Half of Initial Bid for Crypto Firm Ziglu

by Blockchain NewsAugust 19, 2022

Nasdaq-listed financial services platform Robinhood Markets Inc has lowered its bid for United Kingdom-based crypto fintech firm, Ziglu in light of the current realities in the digital currency ecosystem.

The interest in Ziglu was first revealed in April when the US-based brokerage app unveiled a $170 million bid to take up ownership of the startup.

Robinhood has changed its bid and is offering $72.5 million representing a £28.29 share price, an amount less than half its initial proposal. While this new bid will result in losses for some of Ziglu’s investors, Chief Executive Officer Mark Hipperson affirmed that the company’s board has already approved the new bid.

He explained that should Robinhood terminate the existing sales and purchase agreement (SPA), the company would be left in an “extremely challenging market, and undercapitalized for the period ahead.”

“The board has spent significant time in discussion with Robinhood’s CEO and executive team negotiating and improving the terms of their revised offer. Based on these discussions and other considerations, we believe the revised proposal…is the best and only reasonable path forward for the company,” Hipperson said.

Robinhood’s move to slash its offer to acquire Ziglu was influenced by the current market condition, which has revalued most companies by about 50 to 90%. With its initial failure to penetrate the United Kingdom about two years ago, Ziglu, drawing on the regulatory backing, customer base, and unique solutions, represent the best bet for Robinhood to expand its footprint into the UK.

It is unclear when the new deal will be finalized. However, the new bid submitted by Robinhood is evident the company is keen, according to CEO Vlad Tenev, to “work to leverage the best of both companies, exploring new ways to innovate and break down barriers for customers across the UK and Europe.”

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Tagged : Crypto / News / Robinhood / Ziglu

FTX Denies Making Internal Deliberations on How to Acquire Robinhood

by Blockchain NewsJune 28, 2022

Sam Bankman-Fried’s FTX Derivatives Exchange is reportedly making internal deliberations on how to acquire Nasdaq-listed brokerage firm Robinhood Markets Inc. However, FTX denied its claims.

Bloomberg reported earlier, citing people familiar with the deliberations, that the crypto behemoth has not made a formal offer to acquire Robinhood at this time, and one of the sources says the final decision may change in the coming days.

“We are excited about Robinhood’s business prospects and potential ways we could partner with them,” Bankman-Fried said Monday in an emailed statement, according to Bloomberg, “that being said, there are no active M&A conversations with Robinhood.”

Robinhood’s stock has once surged by 15% after Bloomberg reported that FTX was looking to acquire the popular trading app, Its share price closed at $9.12, was up 14%.

Beyond the world of cryptocurrencies, a lot of tech startups across the globe have been experiencing a massive devaluation owing to the gloomy global economy. While the world is yet to recover from the pangs of the Coronavirus pandemic fully, the Russian invasion of Ukraine further aggravated the economic turmoil.

Amidst these, Robinhood which attained its fame during the active COVID-19 years has seen as much as three-quarters of its share price erased in the past year as brokerages particularly took a hit. While Robinhood has not declared it is struggling to keep its business running, there is evidence pointing to the fast declining rate of transactions and revenue across the board.

The first impression that suggested FTX might be interested in Robinhood came when Sam Bankman-Fried’s wholly controlled entity, Emergent Fidelity Technologies acquired a 7.6% stake in Robinhood last month, a move that sent the shares of the company soaring at the time.

FTX and its American subsidiary FTX US has been very active on the Merger & Acquisition (M&A) scene in the past year. Most of the company’s acquisitions have been centred on outfits that can further help advance its brand name as a leader in the trading and financial services sector. The most recent acquisitions include LedgerX and Embed, a regulated clearing startup.

Should the acquisition of Robinhood become a thing, the FTX exchange would have doubled its position in both the cryptocurrency ecosystem as well as the mainstream stock markets.

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Tagged : Exchanges / FTX / M & A / Robinhood / Sam Bankman-Fried

Robinhood Lays Off 9% Workforce, Shares drop

by Blockchain NewsApril 27, 2022

Robinhood is laying off 9% of its full-time workforce, CEO Vlad Tenev announced, as the shares of the company’s stock hit a new low.

Tenev, in a blog post, said that the lay-offs came after a headcount growth that “led to some duplicate roles and job functions, and more layers and complexity than are optimal.”

According to Reuters, the online trading platform had 3,400 employees, so around 300 people may be affected by the cut.

Since the beginning of 202, Robinhood has witnessed an increase in its employees from 700 to 3,800.

Regardless of the lay-off, Robinhood claims that its financial position is strong. Tenev announced that the company has over $6 billion in cash on its balance sheet.

Tenev said, “after carefully considering all these factors, we determined that making these reductions to Robinhood’s staff is the right decision to improve efficiency, increase our velocity, and ensure that we are responsive to the changing needs of our customers.”

Following the news of the lay-off, shares of the company’s stock closed at $10 on Tuesday, the lowest price since Robinhood went public in July 2021.

Robinhood’s layoff announcement comes days before the company is expected to report its Q1 2022 financial performance.

The company posted a $423 million net loss for its last quarter.

In one of its major recent crypto developments, Robinhood officially rolled out its long-awaited cryptocurrency wallet in early April, providing access to more than 2 million customers on the waiting list for the digital product.

The release of the wallet shows the company’s commitment to the crypto space, Robinhood said. Robinhood’s wallet will allow users to experience crypto interaction outside the company’s trading platform, such as buying non-fungible tokens (NFTs).

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Tagged : Blockchain / Crypto / Enterprise / LAYOFF / Robinhood / Vlad Tenev