Robinhood Teases Crypto Transfers on its App
Robinhood’s plans for an upcoming crypto wallet have surfaced, however, the company is yet to release any official details. This has left users questioning what sort of functions this new service will have, and whether it will give traders more control over their crypto investments.
Robinhood Zeros in On Crypto
News of this new crypto wallet was discovered by iPhone users who downloaded Robinhood’s beta version of their app. Traders noticed a hidden page with a waiting list form, urging anybody who is interested in using a crypto wallet to sign up.
At the moment, it is not clear how advanced the Robinhood crypto wallet will be, or whether it will support all cryptocurrencies offered by the platform or only support a select few. However, according to embedded code within the app, it looks like it will at least be allowing the capacity for crypto transfers.
This is a highly sought-after feature and a consistent thorn in Robinhood’s marketing. In the past, the company has avoided transfers and withdrawals for fear it would damage its finances. In their initial SEC filing report, they even stated withdrawals could:
“…result in loss of customer assets, customer disputes and other liabilities, which could adversely impact our business, financial condition and results of operations”.
Despite this information being publicly available, Robinhood CEO, Vlad Tenev, has been navigating the discussion differently. During an investor call, he said:
“The ability to deposit and withdraw cryptocurrencies is tricky to do with scale. We want to make sure it’s done correctly and properly, and we want to make sure that everything from a security and operations standpoint is as bulletproof as possible because our top value is safety first, and we hold ourselves to a very high standard for that”.
Will this Save The Platform?
If crypto transfers/withdrawals happen, it could be the turning of a new leaf in Robinhood’s journey. If handled correctly, this could be the beginning of the platform treating its customers with more respect, and rebuilding its fractured relationship with its clientele.
News of this new wallet comes after Robinhood announced its crypto recurring investments feature. This allows people to automatically, purchase certain cryptocurrencies on a daily, weekly, bi-weekly, or monthly basis. This, too, is a highly requested feature from its users.
Interestingly, Robinhood’s further developments into crypto occur at a time when exchanges are seeing monumental scrutiny. The SEC launched an investigation into Uniswap Labs earlier this month, and it has pressured Coinbase to abandon its upcoming lending project while providing very few details on why.
Despite this, as well as Robinhood’s own shaky past with regulators, they appear to be unfazed by the current landscape. One possible reason could be that Robinhood cannot afford to be cautious at the moment. The platform has been struggling to compete with the growth of rivals such as Fidelity and eToro – so it may have recognized the only way to do this would be to reform its relationship with retail traders.
Additionally, Robinhood has been fighting negative press surrounding the likelihood of payments for order flow (PFOF) ban, which tanked its stocks when announced by the SEC chair, Gary Gensler. This is because PFOFs are one of Robinhood’s means of generating revenue, as well as the only way it is able to offer commission-free trading.
Essentially, pushing forward with crypto features may be means of getting the app back on track. This is huge news for retail traders who chose to stick by with Robinhood. If withdrawals and transfers become a reality, it will be one of the company’s first signs of respect towards its customer base and could be a mark of greater transparency from the organization in the future.
Do you think having crypto withdrawals and transfers would make Robinhood more appealing to retail traders? Let us know in the comments below.