Robinhood to acquire UK crypto group Ziglu

Robinhood has agreed to buy UK crypto company Ziglu, as the US retail brokerage steps up its expansion beyond share trading and makes a second attempt to push into Britain.

The Californian company said on Tuesday that London-based Ziglu’s “impressive team of deeply experienced financial services and crypto experts [will help] accelerate our global expansion efforts”.

Ziglu, founded in 2014 by entrepreneur Mark Hipperson who helped establish UK digital lender Starling Bank, allows retail investors to buy cryptocurrencies. Robinhood did not say how much it was paying for Ziglu.

The group, which was valued at £85mn last November when it raised £7mn, said its customer base grew fourfold last year as investor enthusiasm for crypto exploded and the sector attracted more investment from mainstream financial companies.

The acquisition by Robinhood comes just over two months after the brokerage warned that the pandemic-driven retail trading boom was cooling. Shares in Robinhood have fallen more than 30 per cent this year.

The Ziglu purchase also hands Robinhood one of the few crypto groups to have won approval from the UK’s financial regulator.

The Financial Conduct Authority’s registration regime, which focuses on an applicant’s money laundering controls and has been plagued by delays, has given the green light to just 33 of the more than 100 crypto companies that have applied since early last year. The regulator has put new applications on hold while it deals with the backlog.

Ziglu is the third UK crypto company with FCA approval to draw the interest of a potential buyer this year. In February, Austrian exchange Bitpanda bought Trustology. The following month, Binance announced a partnership with exchange Eqonex, which owns an FCA-registered unit, in a deal the companies said could lead to a tie-up.

The UK regulator has said that while it does not have the authority to investigate any change in ownership of registered crypto businesses before a deal is completed, it can “take steps to suspend or cancel the registration of a cryptoasset business if it is not satisfied the firm or its beneficial owner is fit and proper” following a transaction.

Robinhood said it eventually planned to integrate Ziglu and expand its operations into Europe. The deal is the first time the US brokerage has targeted the UK since it abandoned a plan to expand into the market in July 2020.

The UK government earlier this month laid out plans to become a “global hub” for crypto as competition among countries to grab a share of the fast-growing but controversial industry intensifies.