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Robinhood, a cryptocurrency and stock trading platform, is accused of market manipulation. Meme-stocks investors from nine different firms have filed a class-action lawsuit against it during a January 2021 rally.
Cecilia Altonaga, a District Court Judge in the southern district in Florida, has given a greenlight to investors in stocks such as GameStop and AMC, to move ahead with a lawsuit against Robinhood. The exchange is alleged of falsely increasing the stocks supply. After Redditors on r/Wallstreetbets showed increased interest in certain cryptoassests and stocks, the prices of several assets including DOGE rose to new heights.
After witnessing the exponential rise of some assets, Robinhood suspended GME stocks buy among others. As a result, the crypto platform was stuck between big hedge funds shorting stocks and retail investors. Users started leaving a one-star review for Robinhood’s app on the Google Play Store. On top of it, the platform put a hold on its plans to launch an initial public offering in the U.S. Meanwhile, investors sued Robinhood in several class-action lawsuits, accusing the platform of behaving in a manner that suits hedge funds, owing to its connections to Melvin Capital and Citadel.
Robinhood also became the target of the U.S lawmakers searching for answers, post the meme-stock controversy. In a hearing held in February, 2021 Vlad Tenev, CEO of Robinhood, testified before a House Financial Services Committee. Meanwhile, on August 2, the New York Department of Financial Services informed the accusers that Robinhood crypto will be paying a penalty worth $30 million to the State. Since the platform has failed in a Bank Secrecy Act/Anti-Money Laundering obligations.
Now, Tenev has disclosed its intentions to cut down 23% of Robinhood’s staff. Tenev said the trading platform didn’t receive any help with the 9% layoffs performed in April. The CEO made this announcement after the financial results of Robinhood were published for the second quarter of 2022. At the time of writing, the shares of HOOD were trading at $10.59 having experienced a 26% increase in the past 30 days.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
