Robinhood launches cryptocurrency trading service in the European Union

Online brokerage giant Robinhood said Thursday it will launch its cryptocurrency trading feature in the European Union, expanding further outside the United States as the company looks to unlock growth from international markets.

Robinhood said its new cryptocurrency product will allow customers to buy, sell and hold a range of more than 25 tokens, including Bitcoin, Ether, Ripple, Cardano, Solana and Polkadot. The company hopes to offer more tokens, as well as the ability to transfer and “stake” or earn rewards from cryptocurrencies in 2024.

The move marks Robinhood’s second major expansion outside the US, after it announced late last month that it plans to launch stock trades to UK customers by early 2024. The company opened a waiting list in the UK last week for the service, which will offer returns of up to 5% on… Customer deposits.

Robinhood is looking to entice EU users to use its service with the ability to earn free Bitcoin for users who trade lots and refer the app to their friends. The company will offer users up to one Bitcoin, based on the percentage of monthly trading volume and the number of users they refer upon registration.

This comes as several major US cryptocurrency companies are turning to the EU for growth after facing a tough time from US regulators. The US Securities and Exchange Commission has targeted several cryptocurrency companies, including Coinbase and Binance, with a lawsuit alleging they violated securities laws.

Meanwhile, the European Union has proposed a comprehensive set of regulations, called the Regulation of Markets in Cryptoassets, which would set stricter rules for cryptocurrency trading platforms and issuers of so-called stablecoins — tokens linked to real-world assets like the US. Dollar or euro.

Johan Kerbrat, managing director of Robinhood Crypto, said the company chose the EU as the first international target market for its cryptocurrency product due to the region developing the world’s first comprehensive set of laws specifically designed for the cryptocurrency industry.

“The EU has developed one of the world’s most comprehensive policies for regulating crypto assets, which is why we chose the region to anchor Robinhood Crypto’s international expansion plans,” Kerbrat said in a statement on Thursday.

Robinhood has also touted transparency and security features in its European cryptocurrency offerings to convince users to trade using its service. The company said it will transparently display spreads on trades, including the discount the company receives from sell and trade orders.

Robinhood said it never mixes customer coins with business funds except for operational purposes, such as paying blockchain network fees, and stores all of its customers’ coins in offline cold wallets.

Robinhood said it also has a crime insurance policy to ensure a portion of assets held across its storage systems are protected from losses due to theft, including cybersecurity breaches. This policy is underwritten by insurers in Lloyd’s, the insurance market.

Cryptocurrency theft has been a major problem for the industry over the past couple of years, with massive blockchain hacks draining millions of cryptocurrencies from users’ wallets. Just last month, HTX and Heco Bridge, two platforms linked to prominent businessman Justin Sun, were hacked for an estimated $115 million.

The blurring of lines between trading venues and custodians became a major issue last year when FTX, the former $32 billion cryptocurrency exchange, collapsed after revelations that sister market maker Alameda Research used client funds to make risky bets on some tokens.