Robinhood, the app that doesn’t do that good – Already 46 legal attacks for the GameStop affair

The flip side of fame – The Robinhood app is the most successful financial service of 2020, with tremendous growth in user numbers since the start of the pandemic. Recently, Robinhood hit the headlines , with its hiatus from trading multiple stocks during the GameStop episode.

6 million new users in 2 months …

In a section of his blog, Robinhood expressed the exponential growth in the number of users of its service crypto. Indeed, during the year 2020, the service had already conquered around 200,000 users per month .

But growth has accelerated further, with the recent explosion in the crypto market. Robinhood therefore attracted 3 million new users on both January and February . These numbers are impressive, but we’ve already seen an explosion in the number of exchange users during the last crypto rush, and that’s not always a good sign .

… and 46 trials in 2 weeks

The popularity of the app doesn’t stop with digital assets. The heart of Robinhood’s business is stock brokerage , which got it into the GameStop affair . During Reddit’s assault on shorted stocks, Robinhood fell victim to its meteoric success.

During last week’s hearing, the broker’s executive confessed that the app did not have the cash to ensure that the positive positions were maintained during times of high volatility .

Following this trading disruption, the app faced a Senate hearing, with 46 class actions and 3 individual lawsuits . The lack of anticipation of the madness that can seize the markets therefore risks being very expensive for the broker.

At the moment, we only have summary information on these group actions. The amount of reparations sought and the number of plaintiffs have not yet been disclosed .