Trading platform Robinhood criticised after restricting GameStop stock purchase

Robinhood is a virtual platform for trading stocks, which is accessible to users through the web or an application, and is targetted at the user base of beginner-level trading enthusiasts.

The platform, known for its “democratic and simple” policy for trading stocks has been in the spotlight since the conversation about “Wall Street vs Reddit” has picked up significant pace on social media, reported Hindustan Times. 

The application decided to limit transactions on stocks like Nokia, Blackberry, AMC and GameStop due to the recent “significant market volatility”. 

Also Read: All you need to know about GameStop frenzy

Robinhood, which offers trade tips and tools for users, stated in an announcement that the users of the trading platform will be allowed to close out positions for selected securities but will be restricted from buying more stocks. This step was taken to “help customers navigate from the uncertainty”, reported Hindustan Times. 

“Our mission at Robinhood is to democratise finance for all…Amid significant market volatility, it’s important as ever that we help customers stay informed,” said Robinhood.

Ro Khanna, a democratic representative in the US, criticised the steps taken by Robinhood and tweeted, “I am for the democratizing of technology of Reddit users standing up to Hedge fund manipulation of shorting. My point is we need to reduce the significance of finance on the real economy, and have a system that incentivizes crowdsourcing for making and building things.”

Alexandra Ocasio-Cortez, a Democrat representative of New York in the House also slammed the steps taken by application and further urged that similar platforms should also be investigated and held accountable for their actions. 

She further tweeted that she would be going live on Twitch to engage with the public and talk about the case of Robinhood and how it has impacted the markets in the US.