Robinhood has recently expanded its services to the picturesque states of Hawaii, Puerto Rico, and the U.S. Virgin Islands, as revealed by the brokerage platform on July 2. This move comes in the wake of a significant regulatory development by Hawaii’s Department of Commerce and Consumer Affairs (DCCA).
On June 28, the regulatory body in Hawaii declared that cryptocurrency services no longer required a money transmitter license to operate within the state. This shift is a major breakthrough for the industry, especially considering that Hawaii is known to have one of the toughest financial regulatory environments in the U.S., alongside California and New York.
In another development, a recent Bloomberg report suggests that Robinhood is contemplating using the regulatory permits of Bitstamp to introduce crypto futures trading to its customers in both the U.S. and Europe. The brokerage platform had earlier entered into an agreement to acquire Bitstamp for a whopping $200 million to enhance its services for institutional clients. The acquisition is still pending finalization and is anticipated to be completed by 2025.
Robinhood’s decision to venture into the crypto market was largely driven by the growing demand from its clients for such products, as mentioned by the company’s general manager of crypto, Johann Kerbrat, when the acquisition was first announced.
Despite its popularity stemming from its commission-free trading model and user-friendly interface, Robinhood continues to face scrutiny following allegations of market manipulation during the 2021 meme craze. The platform had come under fire for restricting access to certain stocks like GameStop and AMC, which had seen a sudden surge in value due to increased investor interest during that period.
The underlying fundamentals of these ‘meme stocks’ often do not align with the hype generated on social media platforms, leading to concerns about the sustainability of their valuations. Amidst these controversies, Robinhood was also embroiled in a lawsuit by investors who claimed to have incurred substantial losses due to the platform’s trading restrictions during the meme frenzy.
Robinhood defended its actions by citing the need to safeguard individuals and the platform from excessive volatility. In a more recent development, the platform has reportedly reached a settlement with the plaintiffs, although the terms of the agreement have not been disclosed.
In the world of cryptocurrency, the debate around ‘Bitcoin Layer 2s’ being categorized as true L2s continues to be a topic of contention. Understanding the distinction between these layers is crucial for investors and enthusiasts alike in navigating the complexities of the crypto landscape.