Robinhood curbs Instant Buying amid increase in deposit requirement
Online broker Robinhood said, on Thursday, it had temporarily disabled a feature on its app that allows users to buy crypto securities instantly. The online broker was criticized by customers after pausing trading in some hot stocks.
“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,” a Robinhood spokeswoman said on Friday.
Through the “Instant Buying” feature on Robinhood, customers have instant access to funds from bank deposits and proceeds from stock transactions. Instant Buying is a paid feature that allows users to instantly settle transactions.
Robinhood’s fee-free and simple-to-use app has made it popular with a new generation of small-time traders and its restrictions on Thursday drew a heavy backlash from high-prole politicians and celebrities.
Retail investors using Robinhood and other apps drove the so-called “Reddit rally” that pushed up shares of GameStop Corp and other companies championed on social media platforms including Reddit, resulting in heavy losses for big hedge funds that had shorted the shares.