Crypto Transfers in Europe: Robinhood’s Expansion and Regulatory Hurdles

Robinhood, the popular U.S.-based financial services platform, recently expanded its cryptocurrency offerings to the European market by launching a crypto transfer service.

This new service supports over 20 digital assets, including major cryptocurrencies like Bitcoin, Ethereum, Solana, and stablecoins such as USDC. One of the key features of this rollout is the ability for users to store their digital assets independently, offering more control and security without relying on third-party services.

Additionally, Robinhood is incentivizing its European users by offering cashback of up to 1% on deposited tokens, making the service more appealing to new customers.

This launch builds on Robinhood's initial European offering, which began in December 2023 with the introduction of Robinhood Crypto.

At the time, the service allowed users to trade cryptocurrencies but restricted them from transferring their digital assets to external wallets, leading to limitations for those seeking more freedom in managing their assets. Now, with the lifting of these restrictions, users are given much more flexibility, positioning Robinhood as a competitive player in the European crypto market.

However, Robinhood's European expansion has not been without challenges. In September 2023, the company settled a $3.9 million case with the California Attorney General's Office, which had accused the platform of violating consumer protection laws between 2018 and 2022. The allegations included misleading information regarding trade execution and the handling of customer assets.

Robinhood had, at times, failed to disclose that some user assets were stored on third-party platforms, as well as forced users to sell assets back to the platform instead of allowing transfers to external wallets.

The settlement includes not only financial penalties but also new requirements for transparency, ensuring that Robinhood provides full disclosure on how assets are stored and how orders are processed.

This is a critical step in addressing regulatory concerns, especially in light of the Securities and Exchange Commission's (SEC) earlier fine of $65 million against Robinhood for similar transparency issues in 2020.

Robinhood’s expansion in Europe comes at a time when the platform is working to rebuild its reputation and ensure compliance with both U.S. and European regulations. By enhancing its crypto services and addressing past legal issues, the company is aiming to strengthen its position in the competitive global market for cryptocurrency trading and transfers.