On the Eve of Testifying Before Congress, Robinhood Announces It Will Provide Crypto Withdrawals

London, United Kingdom - October 05, 2018: Screenshot of Robinhood Markets, Inc.
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Trading platform app Robinhood announced in a tweet yesterday — on the eve of testifying before Congress — that it fully intends “to provide and withdraw cryptocurrencies.”

See: What You Need to Know About Today’s GameStop and Robinhood Hearing
Find: Economy Explained – How Does Cryptocurrency Work, and Is It Safe?

“So much interest in Crypto! To be crystal clear, we fully intend to provide the ability to deposit and withdraw cryptocurrencies, including DOGE. Robinhood Crypto does NOT currently invest in cryptocurrency or use any customer cryptocurrency for our own benefit,” the company said in the tweet.

Dogecoin, according to the Coinbase website, was created as a joke — its name is a reference to a popular internet meme. “It shares many features with Litecoin. However, unlike Litecoin, there is no hard cap on the number of dogecoins that can be produced.” The crypto catapulted earlier this month following a series of tweets Elon Musk posted.

Robinhood’s emphasis on not being invested in cryptocurrencies is in response to a Bloomberg article yesterday, which said that “there’s a prime suspect as to the identity of the owner of the world’s biggest Dogecoin cryptocurrency wallet and it’s a name that should be familiar: Robinhood Markets.”

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See: Musk Tweets Again and Dogecoin – a Bitcoin Rival – Skyrockets
Find: Morgan Stanley May Bet on Bitcoin as It Nears $50,000 in Value

“The timing of the creation of the initial digital wallet used for storage in June 2018 tracks with Robinhood’s offering Dogecoin trading to its customers in July of that year. That’s according to blockchain data tracker Elliptic and echoed by online sleuths on Reddit’s Dogecoin forum,” according to the Bloomberg article.

Robinhood’s CEO Vladimir Tenev is testifying today before Congress, following the market frenzy that ensued when the app halted trading of certain stocks popular on the Reddit subthread r/WallStreetBets, including AMC and GameStop. The app is now not only facing a slew of lawsuits, but increased scrutiny by key financial regulators.

See: Robinhood Registers in-House Lobbyists Amid Scrutiny over Recent Trading Restrictions
Find: Banks Might Treat Bitcoin Like ‘Real Money’ – These Experts Weigh the Pros and Cons 

In a written testimony for the hearing before the House Committee on Financial Services, Tenev says that the buying surge that occurred during the last week of January in stocks like GameStop was unprecedented, and it highlighted a number of issues that are worthy of deep analysis and discussion, according to his written remarks.

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“I look forward to addressing those issues today, but I want to be clear at the outset: any allegation that Robinhood acted to help hedge funds or other special interests to the detriment of our customers is absolutely false and market-distorting rhetoric. Our customers are our top priority, particularly the millions of small investors who use our platform every day to invest for their future. What we experienced last month was extraordinary, and the trading limits we put in place on GameStop and other stocks were necessary to allow us to continue to meet the clearinghouse deposit requirements that we pay to support customer trading on our platform. We have since taken steps to raise $3.4 billion in additional capital to allow our customers to resume normal trading across Robinhood’s platform, including trading in the stocks we restricted on January 28. We look forward to continuing to serve our customers.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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