According to a report from Bloomberg, the well-known trading app Robinhood Markets, which exposed millions of traders to Bitcoin (BTC), Ether (ETH), and Dogecoin (DOGE), is apparently being considered for acquisition by the cryptocurrency derivatives exchange FTX.
Sam Bankman-Fried, the CEO of FTX, said that the business is not actively looking to purchase Robinhood when asked about the potential takeover. In a statement to Bloomberg, Bankman-Fried stated, “We are excited about Robinhood’s business prospects and potential ways we could partner with them. That being said, there are no active M&A [mergers and acquisitions] conversations with Robinhood.” Robinhood, however, chose not to respond to the report.
Key Highlights
- Bloomberg stated digital assets exchange FTX intends to purchase the TradFi-focused firm.
- Previously, Bankman-Fried bought a 7.6 percent stake in the well-known trading app.
Another unnamed source states that FTX has not yet made a final decision and that Robinhood has not yet been formally contacted with an offer.
On hearing about the possible takeover, HOOD shares soared, rising approximately 14% to $9.12 as of this writing. A few weeks ago, the stock hit an all-time low of $6.89.
Is it the first time that FTX & Robinhood have been in the news together?
The connection between FTX and Bankman-Fried and Robinhood is not new. For example, it was revealed in May that the CEO of FTX had invested $650 million in a 7.6 percent stake in the discount brokerage. At the time, Bankman-Fried claimed that although the acquisition indicated his opinion that Robinhood is an “attractive investment,” he had no plans to alter or exert control over the company.
Effect of “crypto winter” on FTX
The cryptocurrencies — and equities in general — plummet as we approach what some refer to as a “crypto winter,” Bankman-Fried and his FTX exchange have played a crucial role in delivering bailouts to failing blockchain firms. For example, BlockFi, a cryptocurrency trading platform, received a $250 million revolving credit from FTX, while Voyager Digital, a cryptocurrency brokerage, received a $500 million loan from Bankman-Alameda Fried’s Research.
