Robinhood coming to Europe through acquisition of UK crypto firm Ziglu

Robinhood, a significant exchange based in the US, has acquired a small UK crypto firm, Ziglu, for an undisclosed fee. The move marks Robinhood’s first step towards opening operations within the UK, as their statement confirms;

“In the near term, nothing will change for current Ziglu customers. Longer term, we’ll integrate Ziglu more fully into Robinhood, bring the Robinhood brand overseas, and work to expand operations beyond the UK into Europe.”

Currently, Robinhood has no plans to open up stock trading to customers outside of the US. Their goal is to “start opening our crypto platform up to customers internationally.”

Ziglu users earn up to 5% on BTC.

Ziglu currently offers a range of products to UK customers, including interest-bearing products such as GBP Boost and BTC Boost. Both offer 5% APY on staked assets. Further, crypto-assets can be held in custody with Ziglu and be spent using a Ziglu debit card.

However, like Robinhood, there are issues with transferring crypto assets in and out of the Ziglu app. Robinhood users could not move crypto in or out of their accounts until this year when they launched their crypto wallet feature. There are still serious limitations with the Robinhood wallet, such as daily transaction limits and waiting for transactions to ‘settle’ when using Robinhood Instant. You can only send $5,000 worth of crypto per day from your Robinhood account.

This raises questions about the liquidity within the exchange, and why such as limit is imposed. Ziglu, however, currently offers no ability to deposit or withdraw crypto onto its platform. It is simply a fiat on and off-ramp for crypto purchases. You can deposit fiat in GBP, EUR, or USD, but you cannot deposit or withdraw crypto. In a recent letter to shareholders, they announced that crypto transfers were coming along with Apple Pay.

We reached out to Ziglu CEO Mark Hipperson directly, who remarked,

“We are delighted at what the combined strength of Robinhood and Ziglu can bring to our customers.”

Robinhood – a major global firm

The news comes just weeks after Ziglu announced they had completed their Series A investment round. They revealed they “received an enhanced offer from a major global firm,” which now appears to have been Robinhood. In the announcement, they further stated that they were looking to achieve an “Appointed Representative” status, which would allow them to offer stocks and shares within the platform.

This could mean that Robinhood will have the framework to provide a similar service to UK customers as it currently offers in the US. However, there is no information from either party to confirm this.

Hipperson also took to Twitter to share the news with the Ziglu community,

I am excited to announce that @ZigluMoney has signed an agreement to be acquired by Robinhood. Democratising finance has always been my passion and with @RobinhoodApp we share a common goal. Working to reduce the barriers to entry for a new generation https://t.co/KMBS6jv0g0

— Mark Hipperson 💙💛 (@markhippo) April 19, 2022

Robinhood’s CEO, Vlad Tenev, also declared that “Ziglu’s impressive team of deeply experienced financial services and crypto experts will help us accelerate our global expansion efforts.”

Ziglu brings just 103,000 new customers to the Robinhood ecosystem of 17 million users. However, the move is likely focused more on acquiring a legal entity that has already passed the required regulatory hurdles than adding users. A timeframe for any changes or rebranding of Ziglu has not been released. Nothing will change in the short term accounting to the announcement.

When or what will happen in the long term is uncertain, but it seems possible that the Robinhood brand will have a presence in the UK at some point in the future. Indeed, it is a valid approach as regulation becomes a focus of the major crypto players to acquire companies who have already navigated the local landscape instead of starting the process from scratch. Could we now perhaps see Robinhood take a similar approach in other territories?