Robinhoods Steps into UK Market by Acquiring Crypto Exchange Ziglu
Alejandro Arrieche Last updated: 
The American brokerage firm Robinhood announced (April 23, 2022) that it acquired Ziglu, a United Kingdom-based cryptocurrency exchange that allows users to buy 11 different digital assets and one of the few firms that are allowed to offer these services by the country’s authorities.
According to the press release published by the company, the move comes as part of Robinhood’s effort to expand internationally and marks the first step the company has managed to give in that particular direction after it failed to launch its brokerage services in the Kingdom back in 2020.
Ziglu is one of the three companies in the country that has been granted permission by the country’s regulatory watchdog – the Financial Conduct Authority (FCA) – to offer customers the possibility of investing in crypto assets. The financial details of the deal were not disclosed.
There are no public records of how many users Ziglu currently serves in the UK but the company reportedly caters to a similar audience than Robinhood as its founder stated that around 46% of its user base is aged 18 to 25 while as many as 74% are under 35 years old.
In regards to the deal, Vlad Tenev, Robinhood’s Chief Executive Officer, stated: “Ziglu’s impressive team of deeply experienced financial services and crypto experts will help us accelerate our global expansion efforts”.
Shares of Robinhood (HOOD) jumped 5% following the news but they are still accumulating a 35% loss so far this year as appetite for former pandemic darlings and growth stocks has decayed in the last few months.
How Big Can The Market Be for Robinhood in the United Kingdom?
According to research from Ziglu, only around 9% of adults in the United Kingdom own cryptocurrencies while estimates from the Financial Conduct Authority point to a total of 2.3 million adults currently owning crypto assets in the country.
Interestingly, the regulator’s survey also found that over a third of that total treats crypto assets as a gamble, not an investment.
“The research highlights increased interest in cryptoassets among UK customers. The market has continued to grow, and some investors have benefitted as prices have risen”, stated Sheldon Mills, the FCA’s Executive Director for Consumers and Competition, back in June 2021 when the survey was released.
Businesses that offer access to crypto assets in the Kingdom are allowed to register their operations with the FCA until 31 March 2022. For now, the activities of companies within the sector are still under review as regulators from across the world keep struggling to make the space safer for investors.
The FCA has been tightening its grip on the firms offering access to these financial assets in recent years. In June 2021, the agency banned Binance – one of the world’s largest crypto exchanges – from offering its services in the country.
The agency currently does not offer protection to investors from any losses they might experience by exposing their funds to the crypto world. Not even if the firms through which they have bought the assets are currently registered with the institution.
The UK Deems Stablecoins as Traditional Electronic Money
In January 2021, the UK government launched a consultation to establish a position in regards to stablecoins, a form of crypto asset whose value is pegged to that of another financial asset – typically a fiat currency.
On 4 April, the results and positions adopted by the government after the consultation process was completed were published. According to the document, the government is now set out to amend and expand its “existing payments regulatory regime to cover issuers of stablecoins and entities providing related services” in the country.
Stablecoins will now be treated as traditional e-money and this makes these digital assets subject to the provisions set forth in multiple existing pieces of legislation such as the Electronic Money Regulations of 2011 and the Payment Services Regulations of 2017.
That said, these regulations along with some other bills were proposed to be amended to fully cover the complex dynamics that dominate the functioning of these innovative assets.
Crypto assets are highly volatile unregulated assets. Your capital is at risk.
The post Robinhoods Steps into UK Market by Acquiring Crypto Exchange Ziglu appeared first on Business 2 Community.
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