Topic: Robinhood launching crypto wallets with commission-free trading (Read 147 times)

Not quite. Trading on Robinhood was restricted because they were no longer able to meet the collateral requirements of their clearinghouse. If Robinhood had simply halted trading altogether, the backlash would have been limited -- what Robinhood did, however, was restricting the buying of GameStop shares, not the selling. This kind of one-sided trading halt is rather unorthodox and to my knowledge unprecedented.

Interestingly most platforms that restricted trading in GameStop shares were neo-brokers like Robinhood. Apart from the occasional trading halt caused by circuit breakers most "proper" brokers did not face any restrictions whatsoever. It goes to show that neo-broker customers are more or less second class citizen in the trading world.

In short: If you want to trade stocks, get an account with a proper broker instead of an app that gamifies options trading. If you want to trade cryptocurrencies, go with a cryptocurrency exchange that actually knows what they are doing. And if you want to hold cryptocurrencies, get a hardware wallet or at least a non-custodial software wallet.



I don't know when you last had to deal with cryptocurrency exchanges, but these days pretty much all cryptocurrency exchanges that are taken seriously are properly regulated and not hiding away as questionable off-shore companies. (Binance being the odd one out). Also be aware that SIPC and its international counterparts do not apply to cryptocurrency holdings.

Will the service be similar to what is happening in PayPal now, or will you be able to get the private key?
Meaning, will you be able to buy, sell after you bypass identity verification and certain restrictions, and trade, or will you own the private key?

In general, I do not think that they will give the private keys, but it will be a central service aimed at speculating in the price of Bitcoin more than a platform for buying and selling.

I agree. Tech companies (at least in the US) have been taking on banks for a while now.

I guess that they want to act like a bank. You give all the identity info they ask and if something happens with your account (and they can't blame it on you!  ) then you'll get your money back by proving (again) your identity.



It depends on how good care they have on that data. And it depends on luck too I guess. Most banks have such data and most were not hacked.

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I don't tell that we should trust Robinhood with our credentials. Au contraire! I only answered those questions 

TD Ameritrade and several other big platforms restricted trades on shares of GameStop to stop volatility and artificially inflated prices by a bunch of kids from Reddit who thought they are getting rich.

If your go with Robinhood, all your gains will be accounted for, for sure. So Robinhood is not for everyone on this forum. Other than that it is a secure and robust platform, just overgrown with some conspiracy theories after GME incident.

But to each his own. Some people, for example, will not put a large chunk of money into an unregulated company in Seychelles that can pack up one day and leave with everyone's money. Some people prefer to have SIPC insurance.

Uh, yeah.  Robinhood has absolutely no idea what they're doing as far as crypto is concerned--or they're dressing up the language to make it appear that all that KYC info is supposed to keep your coins safe (which is probably what they're doing).

I don't trust Robinhood as far as I can throw them, not after the GME debacle.  And they've offered crypto trading for a while now, just not the ability to withdraw coins.  Is that something they're offering now?  If not, this is no big deal.  If they are letting customers withdraw their coins, you'd better believe those coins are going to be tracked by Robinhood and/or the government.  This might appeal to all the current Robinhood customers who just want to day trade, but I doubt many people on bitcointalk are going to find any value in whatever Robinhood is up to.

Robinhood you're talking about them and I actually know a lot of bad news that we should fact-find the news and about them I don't care They've gone strong in stocks and that's when the hedge funds be taught a lesson. What did Robinhood do in that state? Right. I saw this information and I really have a bad feeling about them.

I don't care what they launch, I don't trust them at all. It's not even about custodial wallets, as much as about their particular work ethics. The most prominent story that comes to my mind is that thing with Gamestop. Reddit users decided to play a cruel joke on rich Wall Street guys, and on a free market, as it should be, they had a full right to do so. They pumped the stock hard, and that was about time hedge funds were taught a lesson. What did Robinhood do in that situation? That's right, they froze the trades because it was a helpful decision for their stock trading friends who were already losing lots of money and didn't want to lose even more. Do they really think that crypto users will simply forget and now give a company like this access to their funds?

Do yourself a favor and stay away from Robinhood.

First of all they make their money by selling their users' order flow, so it's not really "free", rather the costs are hidden. (i.e. they are another prime example of the old adage that if you're not the customer, you're the product). Secondly during that whole GameStop saga it became pretty clear that they have questionable liquidity and may just run on leverage. If that's their situation with stocks, imagine how their situation with cryptocurrencies may be. No way I'd leave coins with them.

I never imagined this day would come and we'll see a waiting list for a "custodial" wallet that comes from an exchange that has a dubious reputation!

I wouldn't be so sure about that ^{[at least not for the end-users part]}.
^{- Not Your Keys, Not Your Coins.}

They're late to the party, I mean if you look at it, they're just doing the same thing as Binance so I don't think that it's going to be that big of a hit for them because it's not a new thing, not to mention that people remembers what they did during the Gamestop mania, selling the stocks of their users without their permission is a pretty deep wound for anyone to forget.

"At Robinhood, we’re designing wallets to be intuitive, with security features such as identity verification, multi-factor authentication, and email and phone verification to keep coins safe from hacks and other threats."

https://blog.robinhood.com/news/2021/9/22/crypto-wallets-are-coming-to-robinhood

Since when does identity verification protect your coins from the threat of hacking or makes it safer to store your crypto? I thought it was always exactly the opposite, in the case of a hack all your identity information might be stolen by a malicious actor, which further might be used against you making your coins and yourself painfully vulnerable to physical and virtual attacks. It is rather a security hole than a security feature.

Robinhood is about to launch crypto wallets. Bitcoin trading is already commission-free with Robinhood account but you buy and sell crypto like any other stock market asset.

With crypto wallets, as I understand, it will be possible to actually trade those coins.

There is a waiting list and in my experience it takes at least a few weeks to roll out a new feature to your account but you can join the waitlist now.

Obviously, with Robinhood you will need to report your gains to IRS in the US and corresponding tax agencies in other countries.