Robinhood chief executive to testify before U.S. Congress

The U.S. House Financial Services Committee will examine the actions of Robinhood, a crypto-friendly platform, during the GameStop stock rally, Politico reports, citing sources familiar with the matter.

According to them, testimony on February 18 will be given by Vlad Tenev, co-founder and chief executive of the company.

On February 2, Congresswoman Maxine Waters announced the hearing in the committee. She did not indicate whether a Robinhood representative would testify.

🚨 #BREAKING: Chairwoman @RepMaxineWaters Announces #February Hearing on Recent Market Volatility Involving GameStop, Other Stocks | https://t.co/RpXl8p9ssQ pic.twitter.com/OE4EP1nYfd

— Financial Svcs Cmte (@FSCDems) February 1, 2021

Fox Business Network correspondent Charles Gasparino, citing sources inside Robinhood, said the company postponed IPO plans and focused on addressing the fallout from the scandal.

SCOOP: People inside @RobinhoodApp tell @FoxBusiness plans for an IPO are on hold to focus on surviving the current drama over trading of stocks and settlement issues. Execs say they have access to even more capital than additional amounts raised today. More @TeamCavuto 1230pm

— Charles Gasparino (@CGasparino) February 1, 2021

On January 28, Robinhood restricted trading of GameStop shares and several other assets amid their sharp rise, provoked by members of the r/WallStreetBets group on the Reddit platform.

https://hub.forklog.com/reddit-protiv-fondy-kto-pobedit/

The trading halt drew investor discontent. They filed class action against the service, accusing it of a “willful and deliberate” deprivation of private traders’ ability to invest.

As a result of the GameStop rally, hedge fund Melvin Capital lost 53% of capital in January. The total losses of short sellers on the company’s stock last month were estimated at $19.75 billion.

The trading restrictions were explained by Tenev as a measure to protect the platform and its customers.

The platform also disclosed raising $3.4 billion from Ribbit Capital, ICONIQ Capital, Andreessen Horowitz, Sequoia, and Index Ventures.

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