Robinhood Taps European Market to Expand Crypto Services Amid US Legal Challenges
Summary:
Robinhood is extending its crypto services to Europe amid legal issues in the US. It announced its first crypto-staking product, allowing customers to stake Solana (SOL) and earn 5% yield. The company also launched local-language crypto services in Italy, Poland, and Lithuania. Despite reporting a surge in crypto trading activity in Q1 2024, Robinhood faces an impending enforcement action from the US SEC for potential securities violations related to its cryptocurrency listings and operations.
In the midst of impending legal issues in the United States, Robinhood, the trading platform, seeks to grow its crypto operations by reaching out to users in Europe. In an exclusive offering for European consumers, Robinhood rolled out its inaugural crypto-staking service on May 15. According to a recent announcement, those using Robinhood can now stake Solana (SOL) and avail a 5% yield via the application. In comparison, major competitors like Binance and Kraken offering SOL staking promise yields that go up to 5% and 8% respectively.
A passive reward is granted to stakers from their existing holdings for strengthening the network. This process involves locking up the users' tokens to ensure secure and validated transactions across the network. The rewards from staking can fluctuate due to several influencing factors such as network inflation, volume of the staked SOL, commission rates of validators, and prevalent market scenarios.
Significantly, Robinhood has also introduced localized versions of its crypto services for users hailing from Lithuania, Poland, and Italy, accompanied by informative content revolving around Bitcoin (BTC), USD Coin (USDC), and Avalanche (AVAX). Robinhood's General Manager, Johann Kerbrat, stated their European users have vocally expressed their need for a language-specific operating application and tools to amplify their passive income sources.
SolanaRobinhood has reported a significant boost in crypto trading activity during the first quarter of 2024 with crypto trading volumes surging by 224%, amounting to a total of $36 billion. The firm accumulated nearly 40% of its transaction-based revenue through crypto-related services, contributing to its consecutive profitable quarter with net earnings worth $157 million.
However, Robinhood's crypto operations are seeing an increasing number of hurdles. The U.S. Securities and Exchange Commission (SEC) sent a Wells notice to the company on May 6, suggesting enforcement action against its crypto division is on its way. Robinhood's cryptocurrency listings and its crypto custodian activities have been under SEC's scrutiny for potential securities violations. In a bid to evade these violations, Robinhood has refrained from offering staking services in the United States. In addition, certain crypto tokens are not listed and lending services are also unavailable.
Looking at the broader picture of crypto market makers' operations, it raises crucial questions: are they providing liquidity, or are they really manipulating the industry?
Published At
5/15/2024 7:59:15 PM
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