“We’ve been doing a lot of work behind the scenes to provide our crypto
customers with the functionality that they’ve been asking for,” said
Robinhood CEO Vlad Tenev.
Stock and cryptocurrency trading app Robinhood is reportedly
exploring a way for users to be better protected from volatile crypto
prices.
According to a Tuesday Bloomberg report, the trading app is working
on a feature called “price volatility protection,” which would modify
certain crypto orders depending on fluctuations in price. A message in
the feature’s code says Robinhood “may sometimes skip your recurring
orders or buy less than your chosen amount” to protect trades from price
volatility, but will inform users before taking such action and never
purchase more than the amount selected.
“We’ve been doing a lot of
work behind the scenes to provide our crypto customers with the
functionality that they’ve been asking for,” said Robinhood CEO Vlad
Tenev. “We want to introduce new features safely, and there’s a lot of
items we have to get right from the start."
Reports of the proposed feature come after Robinhood briefly suspended instant deposits for crypto purchases
in January. The trading app cited "extraordinary market conditions" at
the time, likely referring to retail investors from Reddit pumping
Dogecoin (DOGE)
— the token surged more than 900% at the time and has been volatile
throughout the year, rising to an all-time high price of $0.68 in May.
Robinhood later reported 34% of its revenue from the first quarter of 2021 was directly attributable to transactions
for the meme-based cryptocurrency, and claimed its business could be
adversely affected "if the markets for Dogecoin deteriorate or if the
price of Dogecoin declines.” According to the trading app, 17% of its
total revenue for the same period was derived from transaction-based
revenues earned from all crypto transactions, with more than 9.5 million
customers trading roughly $88 billion.
Related: Robinhood COO: We have enabled more women to trade crypto
In
addition, regulators in the United States have reportedly turned their
attention to the trading app. The Financial Industry Regulatory
Authority announced in June it would be penalizing Robinhood roughly $70 million
based on the results of an investigation alleging the app had caused
“widespread and significant harm” to thousands of users and exhibited
“systemic supervisory failures” starting as early as September 2016.
Robinhood said it reached an agreement-in-principle with the regulatory
body to pay some of the fines on a “no admit, no deny basis.”
source link : https://cointelegraph.com/news/robinhood-introduces-feature-aimed-at-protecting-investors-from-crypto-volatility
