Trading platform Robinhood is aggressively targeting European users to expand its crypto services. This move comes when legal challenges loom in the United States. On May 15, the company announced its first crypto-staking product, exclusively for European customers.

According to an announcement, Robinhood customers can now stake Solana (SOL) and receive a 5% yield through the app. Competitors offering SOL staking, including Kraken and Binance, advertise yields of up to 5% and 8%, respectively.

Staking and Passive Rewards

Stakers receive passive rewards from their holdings in exchange for supporting the network. Users lock up their tokens when staking to validate transactions and secure the network operations.

Rewards from staking can change over time due to several factors, such as network inflation, the amount of SOL staked, validators' commission rates, and market conditions.

Along with SOL staking, the company introduced local-language versions of its crypto services for users in Italy, Poland, and Lithuania. These services come with educational content focusing on Bitcoin (BTC), USD Coin (USDC), and Avalanche (AVAX).

"Our customers in Europe have told us loud and clear that they want an app that provides local language support and products that help them earn additional passive income," said Johann Kerbrat, general manager of Robinhood Crypto.

Robinhood has seen a surge in crypto trading activity in the first quarter of 2024. The firm posted a 224% increase in crypto trading volumes to $36 billion.

Approximately 40% of its transaction-based revenue was generated by crypto-related services, resulting in the firm's second straight profitable quarter with a $157 million net income.

Legal Challenges in the U.S.

Despite the growing market demand, Robinhood's crypto business still faces many challenges. On May 6, the company received a Wells notice from the U.S. Securities and Exchange Commission (SEC), indicating an incoming enforcement action against its crypto arm.

According to the filing, the SEC investigated Robinhood's cryptocurrency listings and crypto custodian operations for alleged securities violations.

As a precaution against possible securities violations, the company does not offer staking services in the United States, list some crypto tokens, or provide lending services.

"Our customers in Europe have told us loud and clear that they want an app that provides local language support and products that help them earn additional passive income," said Johann Kerbrat, general manager of Robinhood Crypto.

Robinhood's strategic move to expand its footprint in Europe underscores its focus on diversifying its markets. This strategy aims to mitigate risks associated with regulatory scrutiny in the United States.

As the company navigates legal challenges at home, its European expansion reflects a proactive approach to sustaining growth in a lucrative but highly regulated industry.