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Robinhood to Plan Testing Cryptocurrency Wallets, Speeding up Crypto Territory Escalation

Robinhood Markets has announced that it plans to start testing cryptocurrency wallets next month, with a broader rollout in early 2022 to allows its customers to move supported crypto assets in and out of their brokerage accounts.

On September 22, the new public brokerage firm has stated that it plans to begin surveying its current crypto trading customers in the next few weeks, who constitute about 60% of the app’s 21.3 million active users and select a small group of respondents to start testing the new wallets and provide feedback.

Robinhood’s crypto lead Christine Brown talked about the development. She said that the firm would take the alpha users’ feedback and address it publicly via its blog and social media account on Twitter. Brown also stated that people on the waiting list will begin getting access to wallets by the end of 2021 and that Robinhood’s cryptocurrency wallets will generally be available in early 2022.

The Menlo Park-based retail brokerage firm allows holding, buying, and selling crypto assets at present, like Bitcoin, Ethereum, and Dogecoin. Last quarter, Robinhood witnessed cryptocurrency transactions exceeded equities transactions for the first time.

RobinHood customers, who benefited from a boom in retail trading during the pandemic, have long asked for cryptocurrency wallets. Some community members feel that buying and selling cryptocurrencies on Robinhood does not let them own crypto. For example, customers of Robinhood currently can’t use their Bitcoin holdings in the app to buy an NFT and cannot use the Robinhood app to buy stocks with Bitcoin.

The so-called cryptocurrency wallet will allow customers to receive, trade, and spend digital currencies, as well as move them in and out of the Robinhood app. Furthermore, the crypto wallet will enable customers to buy stocks, digital assets like non-fungible tokens (NFTs), and other products using cryptocurrencies and transfer or spend their crypto coins without converting them into another fiat currency first.

Brown stated that the wallet will initially only support holding the Robinhood Crypto’s coins, covering major coins like Bitcoin, Ethereum, and Dogecoin. Furthermore, Robinhood is planning to expand the currencies available on its platform in the future.

Companies Earn Millions in Revenue from Crypto

Last month, Robinhood Markets announced that cryptocurrency accounted for more than half of all transaction-based- based sales in the second quarter and disclosed that 62% of cryptocurrency revenue came from dogecoin, a meme-inspired digital coin.

The company stated that its revenue from cryptocurrency transactions in the second quarter was $233 million. It accounted for 52% of transaction-based revenue, up from $5 million in the second quarter of last year and an increase from 17% in the first quarter this year.

While Robinhood has gained popularity by offering free stock trading to a new generation of investors, the firm has also been a big beneficiary of the surge in the cryptocurrency market. Robinhood app allows customers to sell and buy seven cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, Litecoin, and Bitcoin Cash.

Coinbase, which went public earlier this year, Square’s Cash App, and PayPal are also other popular services used by US consumers to sell and buy cryptocurrencies.

Voyager Digital Suspends Crypto Trading, Deposits & Withdrawals

Voyager Digital, a cryptocurrency brokerage firm, announced last Friday that it has suspended all customer trading, deposits, withdrawals and loyalty rewards.

“This was a tremendously difficult decision, but we believe it is the right one given current market conditions. This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the appropriate time,” said Stephen Ehrlich, CEO of lending firm Voyager Digital.

Voyager has been facing financial challenges that have adversely affected its operations. On June 22, the lending firm revealed that it had huge exposure to the crypto hedge fund firm Three Arrows Capital (3AC). Last week, Voyager issued a notice of default to the struggling crypto hedge fund for failure to repay its loans.

The loans totalled about $665 million, consisting of 15,250 BTC ($294 million) and $350 million in USDC. Voyager said that it had requested Three Arrows Capital to repay $25 million in USDC by June 24, and repay the entire balance of USDC and BTC by June 27.

Since 3AC defaulted, Voyager recently disclosed plans to pursue all means to recover its funds from the crypto hedge fund firm, including through a court-ordered liquidation process in the British Virgin Islands.

Voyager recently secured over $500 million loans in form of $200 million in USDC and $294 million worth 15,000 BTC from Alameda Research, a quantitative trading firm owned by FTX boss Sam Bankman-Fried, to mitigate its $665 million exposure and weather the crypto winter.

So far, Voyager has received access to the $75 million part of the FTX loan, but it seems that was not enough to keep its business operating as usual. The firm looks forward to accessing more funds whenever available.

The Fragile Crypto Market

The ongoing crash of cryptocurrencies has left several market players in the industry facing financial difficulties.

Bitcoin and altcoins have plunged hard as the market experiences new realities triggered by interest rate hikes by the Federal Reserve and the collapse of TerraUSD stablecoin and its sister cryptocurrency Luna.

On June 12, crypto lender Celsius suspended all account withdrawals, citing “extreme market conditions.” Reports showed that Celsius invested hundreds of millions of dollars in the illiquid token derivative called Staked ether, or stETH, another controversial cryptocurrency that caused damage in the digital asset market, after the fall of TerraUSD.

A prominent crypto lending firm BlockFi also has been facing financial struggles as it had significant exposure to Three Arrows Capital. The crypto lender recently announced massive job cuts and its valuation dramatically reduced from $5 billion to $1 billion. Last week, BlockFi secured a $250 million revolving line of credit from FTX to bail out its business.

Fujitsu Files Trademark for Crypto Brokerage Services

Japanese multinational tech company Fujitsu has filed a trademark application with the United States Patent and Trademark Office (USPTO) for a new branding that intends to offer a range of financial services, including cryptocurrency brokerage services. According to the official document filed on March 16, the proposed mark consists of the stylized word “FUJITSU” with a sideways s-shaped swirl over the “J” and “I.” The new branding would support various financial facilities, such as accepting deposits, financing loans, financial management, and the exchange of crypto assets.

Fujitsu has been increasingly interested in the Web3 technology space, with the launch of its Web3 acceleration platform in February 2023. The platform aims to support startups and partner companies in creating a diverse ecosystem of Web3 applications that span a range of use cases, including digital content rights management, business transactions, contracts, and processes. The move demonstrates Fujitsu’s commitment to driving innovation in the emerging Web3 industry.

The company’s decision to offer cryptocurrency brokerage services comes as financial regulators in Japan call for stricter banking rules for the crypto sector. In January 2023, the Deputy Director General of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, urged global regulators to introduce tighter banking rules to improve the crypto industry’s governance and internal controls. He acknowledged that the issue wasn’t with crypto technology itself but with the “loose governance, lax internal controls, and the absence of regulation and supervision” that led to recent scandals in the sector.

Fujitsu’s move into the crypto brokerage services market signals its recognition of the growing importance of cryptocurrencies and blockchain technology in the financial industry. The new branding could help Fujitsu establish itself as a leading provider of crypto-related financial services, leveraging its extensive expertise and resources in the technology sector.

In conclusion, Fujitsu’s trademark application for cryptocurrency brokerage services and other financial facilities demonstrates the company’s commitment to the emerging Web3 industry and its growing interest in cryptocurrencies. The move could also help Fujitsu establish itself as a leading provider of crypto-related financial services and position itself at the forefront of innovation in the financial technology sector.