The US financial services company Robinhood continued with restricting its users from accessing its most popular products. After yesterday’s halt of GME stocks, the platform has suspended instant cryptocurrency buying, citing “extraordinary market conditions.”
Robinhood’s Restrictions Reach Crypto
Following the GameStop sage, in which the company’s stocks went parabolic driven by retail interest, Robinhood barred traders from buying its shares. The firm argued that it was looking out for its clients’ interests.
However, most people refuted the reasoning, which led to a class-action lawsuit against the company filed by a customer. He blamed the trading platform for “purposefully and knowingly” trying to manipulate the market “for the benefit of people and financial institutions who were not Robinhood’s customers.”
It seems that this controversy was not enough for the San Francisco-based firm as it halted instant deposits for cryptocurrency purchases earlier today.
“Due to extraordinary market conditions, we’ve temporarily turned off Instant buying power for crypto. Customers can still use settled funds to buy crypto. We’ll keep monitoring market conditions and communicating with our customers.” – commented Robinhood spokesperson cited by CNBC.
The so-called “extraordinary market conditions” came in the past 24 hours as the WallStreetBets craze reached the crypto markets, and especially the popular meme coin – Dogecoin. Following social media posts, DOGE skyrocketed by about 1,000% in a day, decreased heavily, and surged once more.
Additionally, bitcoin saw “just” double-digit percentage gains today by adding $6,000 of value in hours after Tesla’s Elon Musk put Bitcoin as the only word in his Twitter bio.
Crypto Community Is Not Happy
Robinhood faced severe backlash after its decision to suspend users from purchasing the GME stocks yesterday. Although the company said it would resume limited buys today, the situation worsened following the crypto restrictions.
Somewhat expectedly, the ever-loud community quickly caught Robinhood’s controversial decision and didn’t hold anything back.
The comments ranged from urging investors to avert using the Robinhood platform to blunt threats and profanity against the company. Some questioned the firm’s motives, saying that it didn’t halt any trading when the market was plummeting a few weeks ago or during the liquidity crisis in mid-March.
Popular Bitcoin proponent Anthony “Pomp” Pompliano believes that the solution lies with decentralized products and services, as their centralized alternatives could have too much power.
Robinhood is now restricting crypto trading.
We must decentralize these products and services.
If you’re building a piece of the new decentralized financial system, I want to talk to you and potentially invest.
— Pomp 🌪 (@APompliano) January 29, 2021
Another similar example of centralized power came from Google and Apple. Reports asserted that the two US-based giants had removed hundreds of thousands of negative reviews against Robinhood.