Robinhood
- Trading Name: Robinhood
- Legal Entity: Robinhood Markets, Inc.
- Activities: Robinhood offers a commission-free trading platform for stocks, options, ETFs, and cryptocurrencies.
- Location: Headquartered in Menlo Park, California, USA.
- Regulations:
- USA: Robinhood is regulated by the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
- UK: Authorized and regulated by the Financial Conduct Authority (FCA).
- Other Approvals: Various state licenses across the USA.
- Key People: Vlad Tenev (CEO)
Robinhood is a publicly-traded, U.S.-based, and SEC-regulated broker-dealer offering commission-free crypto and stock trading. It offers a relatively low number of assets for trading compared to most dedicated crypto exchanges.
Offering
Robinhood provides commission-free trading for stocks, options, ETFs, and cryptocurrencies. The platform also offers margin trading, cash management services, and educational resources for investors.
Fees
Robinhood charges no commissions for trading stocks, options, and ETFs. Margin trading incurs interest charges, and certain services may have fees, such as instant withdrawals.
Industries
Robinhood operates in the financial technology (FinTech) and cryptocurrency industries.
Online Reputation
Robinhood has a mixed online reputation. It is praised for its user-friendly interface and commission-free trading model but has faced criticism regarding customer service and regulatory issues, including recent SEC investigations.
Reviews
- Google Reviews: Robinhood has a rating of 4.1 out of 5 stars based on over 486,560 reviews on Google Play.
- Trustpilot Reviews: On Trustpilot, Robinhood has a 1.3 out of 5 stars based on over 3,600 reviews. While the app is praised for its user-friendly interface and commission-free trading, it faces criticism for customer service issues and technical problems during high trading volumes. Some negative reviews on Trustpilot have been attributed to organized review bombing following controversial trading restrictions.
Recent News
Recently, Robinhood acquired the European cryptocurrency exchange Bitstamp for $200 million. This acquisition aims to enhance Robinhood’s cryptocurrency offerings and expand its presence in the European market. The move follows ongoing legal challenges with the SEC regarding securities law compliance.
SEC Challenge
Robinhood has received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), indicating that SEC staff have recommended enforcement action against the company. This notice is related to Robinhood’s cryptocurrency operations, which have been under SEC scrutiny. Receiving a Wells Notice does not imply guilt but suggests the SEC may pursue legal action. Robinhood has previously disclosed subpoenas from the SEC, indicating an ongoing investigation into its crypto activities. The company is preparing to address these regulatory challenges while continuing its operations
Conclusion and Rating
We classify Robinhood as Orange due to regulatory challenges from receiving a Wells Notice from the SEC, indicating potential legal action regarding its cryptocurrency operations. Additionally, Robinhood has a low rating of 1.3 stars on Trustpilot, reflecting consistent criticism of their customer service and technical issues. These factors highlight significant areas for improvement and influence our overall rating.
