Robinhood coming to Europe through acquisition of UK crypto firm Ziglu

Robinhood, a major US cryptocurrency exchange, has purchased Ziglu, a small UK crypto business, for an undisclosed sum. As their announcement reveals, this is Robinhood's first step toward launching operations in the United Kingdom.

“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.”

Robinhood currently has no intentions to offer stock trading to customers outside of the United States. "We want to start offering up our crypto platform to customers all across the world," they say.

On BTC, Ziglu members can earn up to 5%.

For UK users, Ziglu now offers a variety of products, including interest-bearing products like GBP Boost and BTC Boost. On staked assets, both give a 5% annual percentage yield. Furthermore, crypto-assets can be retained in Ziglu's custody and spent via a Ziglu debit card.

However, the Ziglu app, like Robinhood, has difficulty with transferring crypto assets in and out. Until this year, when Robinhood debuted its crypto wallet, consumers couldn't move cryptocurrency in or out of their accounts. When utilizing Robinhood Instant, there are still major limitations with the Robinhood wallet, such as daily transaction limits and the need to wait for transactions to'settle.' Your Robinhood account can only send $5,000 worth of cryptocurrency every day.

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 is a large international company.

The announcement comes just weeks after Ziglu announced the close of their Series A funding round. They stated that they "got an increased offer from a significant worldwide organization," which appears to be Robinhood at this time. They also indicated in the release that they were aiming for "Appointed Representative" designation, which would allow them to sell stocks and shares on the platform.

This could mean that Robinhood will be able to offer a similar service to UK customers as it does in the United States. However, neither party has provided any evidence to back this up.

Hipperson also used Twitter to inform the Ziglu community of the news.

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

Ziglu adds only 103,000 new members to Robinhood's 17 million-strong user base. However, it's more likely that the move is motivated by the desire to acquire a legal organization that has already cleared the necessary regulatory barriers than than by the want to gain users. There is no set timeline for any adjustments or rebranding of Ziglu. In the immediate aftermath of the announcement, nothing will change.

It's unclear when or what will happen in the long run, but it appears that the Robinhood brand will have a presence in the UK at some point. Indeed, as regulation becomes a focus of the larger crypto players, it is a valid strategy to buy companies that have already navigated the local context rather than beginning from scratch. Is it possible that Robinhood will now take a similar route in other countries?