Robinhood to Expand Crypto Business in 2021
- The trading platform is planning to grow its crypto team, in order to expand its list of crypto-related offerings.
- The firm might release its own crypto wallet in addition to adding multiple new trading pairs.
Co-founder and co-CEO of Robinhood Vladimir Tenev speaks onstage during TechCrunch Disrupt NY 2016 at Brooklyn Cruise Terminal on May 10, 2016 in New York City. Photo by Noam Galai/Getty Images for TechCrunch
Brokerage platform Robinhood is planning to increase its cryptocurrency trading services and grow its crypto team “hugely” this year, as revealed by the firm’s CEO Vlad Tenev in a fireside chat posted on YouTube on 18 March.
According to Tenev, Robinhood has the intention of making a “huge investment” into its crypto business and expanding its workforce, in addition to adding more crypto trading pairs on the platform. During his Q&A with customers, Tenev also said there was a possibility for a Robinhood crypto wallet to be developed, but added that before its release the firm has to conduct extensive tests for the safety of its customers.
Among the reasons behind the platform’s decision was its sudden growth in cryptocurrency customers, with Robinhood having welcomed around 6 million new crypto customers in the first two months of 2021 alone. The increase in traffic, however, can create a situation where the platform experiences blackouts — as seen by crypto exchanges which occasionally suffer outages in peak trading periods — which is why Robinhood has decided to upscale its service availability and customer support infrastructure, Tenev added.
In the video, Tenev also touches upon the criticism his firm faced after it restricted trading in GameStop and some other stocks earlier this year. He predicts that it may take several months for Robinhood to recover from the negative press, saying they are doing the best they can to “get the true story out there”. He further claims:
“I think there is going to be some documentaries and some movies that will help blast it out to a wider audience. But part of it’s also like people love these stories and the fake, simple story is more interesting than kind of like the true, boring complicated story.”
- The U.S. Department of Justice has seized close to $470 million in Robinhood stock, and an additional $20 million in U.S. currency, as part of its criminal case against Sam Bankman-Fried.
- Lawyers for SBF argued last week that the Robinhood shares were bought legitimately by SBF, using money borrowed from Alameda, and that he was relying on them to fund his defense.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
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- Lawyers for SBF are seeking to block debtors from taking control over $450 million in Robinhood shares, arguing that SBF was relying on his stake to fund his criminal defense.
- Another argument was that SBF had legitimately bought the shares using money borrowed from Alameda Research, one of the few loans that was well documented in the company.
- Robinhood’s crypto wallet, which was rolled out to 2 million users, will not support Ethereum-based services like ERC-20 tokens and NFTs.
- The trading app also revealed it had plans to integrate the Bitcoin Lightning Network, reducing the time and fees associated with transfers.