Robinhood Goes All In on Crypto With Major Product Push — WSJ

By Vicky Ge Huang v and Hannah Erin LangRobinhood Markets, the brokerage upstart that drew in millions of traders during the Covid-era meme-stock frenzy, is making a significant push into crypto by launching a wave of new services designed to make its app a central hub for digital assets.The detailsThe brokerage's new products will allow customers to do more than simply buy and sell cryptocurrencies.Robinhood will follow crypto exchanges Kraken and Gemini in announcing plans to offer "tokenized" stocks to overseas customers. Starting June 30, the company's European investors will be able to trade more than 200 U.S. stocks and exchange-traded funds over a digital ledger and with zero commissions. Such "tokenized equities" would make it easier for foreign customers to access U.S. stocks such as Apple, Tesla and Nvidia as well as popular ETFs, including the SPDR S&P 500 ETF, around the clock.Robinhood also plans to offer tokenized shares of privately owned companies to customers. The trading platform is making stock tokens of OpenAI and SpaceX available to eligible European users this summer, executives said at a crypto event Monday.Robinhood said it is developing its own blockchain, which in time will be used to record transactions for tokenized stocks.The brokerage is also planning to roll out perpetual futures on bitcoin and ether for its European customers by the end of the summer. Perpetual futures are contracts that allow traders to continuously make leveraged bets, and they never expire. Robinhood said eligible traders will be able to trade perpetual futures with up to three times leverage on its platform.In the U.S., Robinhood is launching crypto staking for Ethereum and Solana. Staking is a way for investors to earn rewards by pledging their cryptocurrencies to a blockchain to help validate transactions for a specified period. The Securities and Exchange Commission cracked down on staking under the Biden administration, arguing that it constituted an unregistered security and forcing Kraken to stop offering crypto-staking services in the U.S. while hitting it with a $30 million fine. Kraken relaunched staking for U.S. customers in some states earlier this year.The contextRobinhood's aggressive push into crypto comes as bitcoin is trading near its recent record, with President Trump embracing digital assets and Congress seeking to advance legislation that could make cryptocurrencies part of the mainstream financial system.The company has steadily expanded its market share in crypto, with its recent acquisitions of crypto exchange Bitstamp and Canadian crypto financial-services company WonderFi.The big pictureCrypto forms a key part of Chief Executive Vlad Tenev's ambitious plan to transform Robinhood into a global, comprehensive financial-services firm. Despite its speculative and volatile nature, crypto trading has become a source of significant transaction revenue for the brokerage since its introduction on the platform in 2018.Robinhood's crypto unit has faced regulatory challenges. In May 2024, the SEC issued a Wells notice, signaling the regulator's intent to sue over alleged securities-law violations. However, the investigation was closed without action in February. In 2022, the New York State Department of Financial Services fined the unit $30 million for alleged anti-money-laundering and cybersecurity violations.Write to Vicky Ge Huang at [email protected] and Hannah Erin Lang at [email protected]