Image Credits: Reuters
Robinhood, the popular trading platform, has made a significant move by agreeing to buy back $605.7 million worth of stock from Sam Bankman-Fried, the founder of the now-defunct cryptocurrency exchange FTX. This agreement comes after the U.S. government took control of 55 million HOOD shares owned by Sam Bankman-Fried and FTX co-founder Gary Wang through their company, Emergent Fidelity Technologies, earlier this year. The U.S. District Court for the Southern District of New York approved this share repurchase on August 28, as reported in an August 30 filing with the U.S. Securities and Exchange Commission.
Following this development, the value of Robinhood shares saw a 3% increase, reaching $11.21 during Friday’s early trading session.
Robinhood to Expand Crypto Wallet Services
What’s interesting about Robinhood lately is its substantial holdings in Ethereum (ETH) and Bitcoin (BTC), along with its efforts to expand its cryptocurrency wallet services. According to crypto analytics platform Arkham Intelligence, Robinhood is now one of the biggest holders of Ethereum, with $2.5 billion worth in its possession. It’s essential to note that these significant funds represent user balances that Robinhood holds in custody.
This showcases Robinhood’s role as a custodial service provider for its customers’ cryptocurrency assets. While the largest Bitcoin wallets are held by major exchanges like Binance and Bitfinex, Robinhood’s role as a wallet custodian shouldn’t be underestimated. In addition to Ethereum, a Robinhood-associated wallet holds various other cryptocurrencies, including 122,076 BTC ($3.3 billion), an impressive 34.1 trillion Shiba Inu tokens ($277.8 million), 4.9 million units of Chainlink’s LINK ($29.7 million), and 2.6 million Avalanche tokens ($29.6 million).
Despite its fame in traditional stock trading, Robinhood’s involvement in cryptocurrency trading has recently experienced a decline. The company’s crypto revenue for the second quarter dropped to $31 million from the previous quarter’s $38 million. This decline has led to questions about the factors influencing Robinhood’s crypto trading activities.
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To address evolving user demands and provide more comprehensive support, Robinhood has announced a strategic initiative to enhance its wallet product offerings. This expansion includes adding custodial, sending, and receiving capabilities for two popular cryptocurrencies, Bitcoin and Dogecoin. This move underscores the company’s commitment to offering a more comprehensive cryptocurrency trading experience for its user base.
Robinhood initially made waves in the crypto space when it launched its wallet product in March, offering self-custody services for the Polygon and Ethereum networks. The wallet also facilitated transactions with a variety of tokens, including Compound’s COMP, MATIC, SHIB, Solana, UNI, and the USDC stablecoin, reflecting the company’s dedication to enabling a wide range of cryptocurrency transactions for its customers.
Robinhood’s entry into the crypto market demonstrates its willingness to adapt to the rapidly evolving landscape of digital assets. The company’s efforts to expand its wallet offerings and diversify its crypto holdings underline its commitment to becoming a significant player in the cryptocurrency industry. Despite a recent decline in its crypto trading activity, Robinhood’s strategic moves to enhance its wallet features and accommodate a broader range of cryptocurrencies reveal a long-term commitment to the crypto space.
