Robinhood Is One Step Closer to Launching Its Crypto Wallet
The partnership also intends to enable direct crypto deposits and withdrawals from the Robinhood platform -- a critical feature that's currently unavailable.
- Chainalysis and Robinhood announced an integrated partnership where the trading app will use Chainalysis' data, analytics, and software to bolster anti-money laundering/ combating financing of terrorism (AML/CFT) standards for pending crypto wallet users.
- The software and data upgrades should also enable direct withdrawals and deposits of cryptocurrencies from the Robinhood services suite -- a function that's not available now.
- Robinhood currently has a waiting list of 1.6 million people signed up for its crypto wallet that's set to debut in 2022.
- Robinhood has had a bumpy ride since its July IPO, its price hit $85 per share in August and is trading below $20 per share as of this writing. Its reputation took a black eye last month when a hacker accessed the personal information of millions of accounts.
In a joint announcement today, blockchain data analytics platform Chainalysis and popular online brokerage app Robinhood Crypto entered a partnership to bolster the app's anti-money laundering/ combating financing of terrorism (AML/CFT) compliance and cryptocurrency usability. Under the agreement, Robinhood will leverage Chainalysis' data, analytics, and software tools to meet compliance requirements and provide Robinhood customers with safe, secure crypto transactions.
Robinhood engaged Chainalysis prior to the anticipated launch of the Robinhood Crypto wallet solution that's slated to launch in 2022 and has a waitlist of more than 1.6 million prospective users. The digital wallet upgrades will supposedly give Robinhood customers the ability to deposit and withdraw a wide variety of cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin -- right now Robinhood users cannot directly deposit or withdraw cryptos from the platform.
"We have a strong 'Safety First' policy which guides our decision making and our customer's safety as our number one priority," said Ben Einstein, head of partnerships, Robinhood Crypto in a joint statement. "Chainalysis works closely with regulators and law enforcement to develop industry best practices and that approach is aligned with Robinhood's commitment to working with policymakers in a collaborative manner."
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The announcement noted that Robinhood Crypto will use the Chainalysis "know your transaction" and "Reactor," software solutions that leverage Chainalysis data to manage assorted compliance needs. Robinhood Crypto will also leverage Chainalysis certification programs to ensure various Robinhood teams are appropriately trained and understand the requirements necessary to operate a compliant cryptocurrency business.
"Cryptocurrency's open, transparent, and decentralized technology is designed to democratize finance," said Jonathan Levin, co-founder and chief strategy officer, Chainalysis in the statement. "We are thrilled to work with Robinhood Crypto -- to build trust in cryptocurrency and promote more financial freedom with less risk."
Setting the stage for a better tomorrow?
Despite Robinhood's successful initial public offering in July, the trading app has had a rough go of it this year. The company has been battered by wide stock price swings and is trading at an all-time low today. It also has faced harsh criticisms from users against blocked trades of GameStop and AMC earlier this year, as well as a hack last month that exposed personal information from millions of accounts.
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Hopefully this crypto focus announcement can be part of Robinhood's solution going forward and not another damaging problem to overcome.
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