Robinhood Markets has a following among millennials by offering free stock trades, is nearing to close a funding round from existing investors at a valuation of between $7 billion and $8 billion, as reported by a news agency. The American stock brokerage app, Robinhood, recently launched its crypto-trading app in New York, according to a blog post by the company on May 23rd.
Robinhood Crypto is operating in 39 out of the 50 states in the United States, including California, Florida, and Washington. The company received a BitLicense from the New York State Department of Financial Services in January 2019. The app would now allow New York state residents to trade seven major cryptocurrencies through their platform. The company announced in its blog post:
We recently announced that Robinhood Crypto received the BitLicense and a money transmitter license to operate in New York. As of today, New Yorkers can officially invest in cryptocurrencies on Robinhood Crypto.
Currently, you can invest in seven cryptocurrencies on Robinhood Crypto: Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin, and Dogecoin. You can also track price movements and news for those and 10 additional cryptocurrencies. With New York, Robinhood Crypto is now available in 39 states–you can find the full list here.
In addition to the BitLicense, the company in April applied for a bank charter with the federal regulators in order to offer traditional banking and services on their app but the same has not yet been granted to the company.
Previously, the New York State Department of Financial Services had granted BitLicense to Tagomi trading, allowing the company to trade nonsecurity cryptos on its platform. The Tagomi Trading app received the approval in March, making it the first brokerage company for digital assets. The CEO of Tagomi Trading remarked:
“We are excited that DFS has approved our application as New York’s first agency brokerage for virtual currencies. Our team of industry veterans has developed our order routing services with sophisticated clients in mind and we look forward to expanding our presence with New Yorkers. We appreciate the DFS’s thorough review and careful approach to virtual currency market participants to make for a more transparent and equitable virtual currency landscape”.
In April, Bloomberg reported that Intercontinental Exchange’s crypto trading platform Bakkt was also interested in acquiring a New York BitLicense to offer crypto brokerage services in the state of New York
What is Robinhood?
Robinhood is a US-based financial services company that offers the Robinhood mobile app, a free mobile trading app that lets users invest in publicly traded companies without paying a commission. The company, which is now valued at more than 5.6 billion dollars, is planning to launch an Initial Public Offering this year. In addition to its stock trading function, the app now also supports commission free crypto trading in select states in the US.
In January 2018, the company announced a wait list for its commission-free crypto trading platform on their website. Within the next few hours, the wait list had more than 1250,000 people had signed up on the platform. Later that month, Robinhood Crypto was launched in select areas, with the list of the areas expanding ever since as Robinhood is still in the process of getting approval from different states.
Robinhood Crypto is a separate entity from the Robinhood Financial. Unlike the parent app, Robinhood Crypto has a game-like design and runs 24/7 as unlike financial markets there are no fixed trading days or time in crypto trading. The volatility of the cryptocurrencies makes Robinhood look like a real-time casino, with constant trading and chattering. The reputation of the company has also helped the crypto landscape in general. When new tokens are added on the Robinhood platform, the price usually sees a spark, like Dogecoin’s recent spike.
New York State’s Strict Financial Regulations
New York state has one of the strictest regulatory regimes when it comes to cryptos or financial trading in general. The regulatory approval for cryptocurrency trading in New York, also known as BitLicense, imposes a set of strict rules on any business that wishes to offer cryptocurrency trading within the state of New York. These rules range from strict disclosure to customer protection measures. The framework was introduced in 2015. However, due to a rigorous process, only 16 companies have been granted the BitLicense by the New York State Department of Financial Services as of yet.
Many American states in a bid to attract more investment have shown a lenient stance towards crypto businesses and startups. However, New York has used a stricter approach towards crypto regulations compared to other states. Many influencers have perceived these regulations as a vast governmental overreach yet there are a lot of firms that are still ready to take on the challenge to do business in the financial hub of the United States, New York.