Robinhood, a stock trading app run by CEO Vlad Tenev, is considering launching its service in the UK by the end of the year Credit: Noam Galay /Getty Images
It canceled plans in 2020 amid increased domestic scrutiny over allegations that it was misleading customers. The company has also been criticized by US politicians for the suicide of a 20-year-old teenager who mistakenly believed he had lost hundreds of thousands of dollars on the app.
The family of Alex Kearns, an American university student, accused Robinhood of using “aggressive tactics and strategies to lure inexperienced and inexperienced investors, including Alex, to greater risks.”
Robinhood later settled with the family and the claims were dismissed. Its chief executive, Vlad Tenev, apologized and said the death was “deeply disturbing”.
The fintech company has also faced claims that it has turned stock market investing into a game. At one stage, it included confetti explosions in its app when consumers bought shares, but this was later removed. The city's regulator has previously warned that gaming-like trading apps could encourage “potential gambling behavior.”
In 2020, Massachusetts authorities said Robinhood was “targeting young people with little or no investing experience.” The state's attempt to revoke Robinhood's license was defeated by the court, although the decision has been appealed.
The company was also fined $70 million by the Financial Industry Regulatory Authority in 2021 for technical failures during the March 2020 market crash.
In the US, Robinhood allows customers to borrow money to buy more shares. Customers can also buy and sell cryptocurrencies such as Bitcoin. It is unclear if the cryptocurrency will be immediately available to UK users as Robinhood will need to ensure that the cryptocurrency is registered with the FCA.
Robinhood was valued at over $30 billion when it went public in the US in 2021. but its valuation has since dropped to $11 billion. The company lost over $500 million in the first three months of 2023.
A Robinhood spokesperson confirmed the company plans to expand internationally, but declined to comment further.
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