Robinhood Draws the Attention of U.S. Regulators

The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) will examine Robinhood, a platform friendly to cryptocurrencies. Bloomberg reports.

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According to agency sources, regulators have turned their attention to the startup because of user dissatisfaction. Media reports say that from January to June 2020, more than 400 complaints were filed about Robinhood — four times as many as for Charles Schwab and Fidelity Investments.

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The outages in March were cited as the main cause. Users reported losing substantial sums and being unable to reach Robinhood representatives, Bloomberg says. The article notes that the SEC and FINRA investigation jeopardises the company’s planned initial public offering.

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A company spokesperson told the agency that after the March outage the developers strengthened the platform and increased its reliability. He said Robinhood compensated affected clients.

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The company allows commission-free trading of traditional and crypto assets in its app. In the first four months of 2020, Robinhood welcomed more than 3 million users. Their total reaches 13 million people.

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Earlier in March, the Robinhood app was unavailable for about 17 hours due to high user activity. A second outage occurred a few days later.

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