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Protocol Fintech

Robinhood is back on the offensive with its UK crypto move

Its deal for Ziglu checks regulatory boxes, which is crucial.

Good morning, and welcome to Protocol Fintech. This Thursday: Robinhood resumes its British expansion, Binance steps in a pile of emoji, and sanctions against Russia’s virtual-currency mining industry.

Off the chain

When you screw up massively, could you please at least not blame the intern? That’s how Binance CEO Changpeng Zhao sort of apologized for creating an emoji resembling a swastika that appeared whenever someone tweeted #Binance on Twitter. The company said the emoji’s rollout was “obviously really embarrassing.” Guess this might be something for Binance’s new in-house government affairs team to work on in its spare time?


— Owen Thomas (email | twitter)

Robinhood’s U.K. offensive

Two years after putting its U.K. expansion on hold, Robinhood is taking aim at the major financial market once again.

The company’s acquisition of digital asset firm Ziglu highlights its growing emphasis on crypto. The decision to buy one of the few crypto companies licensed to operate in the U.K. also suggests that, when it comes to crypto, Robinhood understands the importance of playing by the rules.

Robinhood once gave up on the U.K. The company began expanding in the country in 2019, but announced the following year that its U.K. launch and its “global expansion plans” had been put on hold.

  • Robinhood’s first effort in the British market faltered because of “bad timing,” Melody Brue of Moor Insights & Strategy told Protocol. The pandemic crisis was escalating and “building a team and launching a market under those conditions would be rough, particularly in a sensitive regulatory environment,” she told Protocol.
  • Robinhood’s retreat prompted European fintech companies to try to fill the void left by the popular trading app. Ziglu actually said in a tweet that it was “sorry to hear” about the company’s move and invited U.K. users on the Robinhood waitlist to try Ziglu instead.
  • Robinhood is resuming its international expansion at a time when the now publicly traded company has embraced global ambitions that hang heavily on crypto. Buying Ziglu is part of the company’s “aggressive goals” for expanding its crypto services to Great Britain and beyond.

It’s all about crypto this time. Robinhood is now pretty much a crypto company, particularly abroad. Buying Ziglu is part of that strategy.

  • Ziglu, which lets users trade bitcoin and other cryptocurrencies, will “supercharge Robinhood’s expansion across Europe,” Ziglu CEO Mark Hipperson said.
  • Ziglu is a smart buy for another reason. Regulatory battles have been heating up worldwide, including in the U.K. and the rest of Europe where new rules on crypto transactions have rattled the crypto industry.
  • Robinhood may be trying to avoid those hassles, at least in the U.K. Ziglu is one of around 30 crypto companies that have obtained a license from the country’s Financial Conduct Authority, which is known to take a hard line against crypto firms that defy or ignore the rules. Many firms are still waiting to hear back on their applications.

It’s not clear if taking crypto global will lift Robinhood’s flagging shares. Wall Street couldn’t make up its mind. HOOD rallied when the acquisition was first announced Tuesday, before giving up those gains the following day. But “in a down market, Robinhood is making the right move to expand to the U.K. and Europe and expand its user base,” Brue said.

— Benjamin Pimentel (email | twitter)

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On the money

On Protocol: Coinbase’s long-anticipated NFT marketplace has been unveiled with its beta launch on Wednesday. Beta testers will now be able to buy and sell NFTs with a Coinbase wallet or a self-custody wallet.

Also on Protocol: Binance.US is quitting the Blockchain Association, which is ironic, because Binance.US joining the industry trade group is why Coinbase pulled out two years ago. Binance’s American arm is now building up its own government affairs team.

The latest U.S. sanctions on Russia include crypto mining operations. The U.S. Treasury noted that Russia’s mining industry is the third-largest in the world, and the new round of sanctions will be the first time virtual-currency mining companies are targeted for sanctions.

Overheard

David Schwartz, CTO at Ripple, isn’t impressed with Elon Musk’s plans for Twitter moderation. “This is an incredibly bad policy that works absurdly poorly. It rewards unreasonable people and punishes reasonable people. And if there's one lesson to learn from economics, it's that people respond to incentives,” he tweeted.


Jack Dorsey, meanwhile, took a break from Twitter opinions to roast Ethereum. “If you’re building on ETH you have at least one, if not many, single points of failure and therefore not interesting to me,” he tweeted in response to a thread discussion about decentralizing social media.

Moves and hires

Michael Barr is Biden’s nominee to become the Fed’s vice chairman for supervision. Barr is a former Treasury Department official. If confirmed, he will oversee the biggest financial firms, including JPMorgan Chase, Bank of America and Citi.

DriveWealth appointed Gayathri Rajan as chief product officer and Harshal Deo as CTO. Rajan previously held leadership roles at Google for Google Pay and Maps, while Deo worked at eBay and PayPal.

Bitso appointed Thales Araújo de Freitas as country manager for its Brazil operations. Araújo de Freitas previously worked at money transfer firm Global66 and banks Citi and HSBC before joining the crypto exchange.

Former Citi exec Sandy Kaul is joining Franklin Templeton as an SVP. Kaul is the former global head of Business Advisory Services at Citi Prime Finance, and will have a special focus on digital assets and models at her new position.

Anthony Levandowski is the new CEO of crypto startup Pollen Mobile. Levandowski, a former Uber executive pardoned by Trump after being convicted of stealing trade secrets while working at Alphabet’s Waymo unit, has found VC funding for his new startup.

Dustin Cohn joined real-estate startup Cadre as chief marketing officer. Cohn was most recently consumer bank branding chief at Goldman Sachs, joining a number of other executives exiting the bank in the past two years.

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Thanks for reading — see you tomorrow!