Reddit users report anomalies in the US stock trading platform app and crypto assets of Robinhood, which allowed customers to borrow huge amounts.
Recent Crash in Robinhood App for Tradingshares gave users the opportunity to abuse the function of margin trading and borrow up to $ 1.7 million, while having on the account no more than $ 2000. The leverage used by some traders was actually more than 800x, which is many times higher than the opportunities usually offered by exchanges.
Error news fast enoughspread on the Internet, Reddit users were among the first to notice the anomaly. One of them said that he was able to use margin trading to buy 100 shares of AMD, having only $ 3800.
After that, he sold the purchased shares and returnedmoney, and then, taking into account the profit already made, I bought even more shares of AMD. He repeated this process over and over and used margin trading to maximize profits.
Since the legality of such trade is in question,It remains to expect the reaction of the creators of the application and regulators. Users who have abused the failure will most likely not be able to cash out, as transfers usually take a couple of days. It is not yet clear how the company will get out of this situation.
American stock trading platform andRobinhood received a license from the Financial Supervision Authority of Great Britain (FCA) to operate in the country in August. And in July, Robinhood announced the completion of the next round of financing, in which it received $ 323 million. The company's total capitalization reached $ 7.6 billion.