Robinhood Applies for Bank Charter for Its Upcoming Banking Services

By Anne W. | April 29, 2019
Robinhood Applies for Bank Charter for Its Upcoming Banking Services

The US crypto trading platform Robinhood has expanded its services by applying for a bank charter with regulators. 

According to a report from S&P Global Market Intelligence, the partnership between a full-service bank and a mobile-focused trading app is now a common service due to the convenience that it brings. Users can easily trade their cryptocurrencies, funds, and options with just one click. Robinhood is reported to be the crypto trading app that gained five million users in its platform last year.

As a step to increase its business scale starting from banking fields, Robinhood explained that it first needs the charter approval from the Office of the Comptroller of the Currency.

As the press noted, in December, Robinhood claimed to have its checking and savings account guaranteed by the Securities Investor Protection Corp (SIPC). However, SIPC then replied that it only guaranteed funds used for purchasing securities, not cash deposits. After the published statement by SIPC, Robinhood changed their service as “cash management”  to rebrand the launch. According to Reuters, U.S. politicians were accusing Robinhood of causing lack of transparency in service for their 850,000 customers.

As announced in September 2018, Robinhood will soon launch an initial public offering. The company has received $5.6 billion after the investment round for its plan, which marked its as the second-most valuable United States startup in the fintech industry.

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