{"id":36712,"date":"2021-02-19T12:34:30","date_gmt":"2021-02-19T10:34:30","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=36712"},"modified":"2025-08-29T07:42:54","modified_gmt":"2025-08-29T04:42:54","slug":"robinhood-co-founder-denies-collusion-with-hedge-funds-at-us-congress-hearings","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/robinhood-co-founder-denies-collusion-with-hedge-funds-at-us-congress-hearings\/","title":{"rendered":"Robinhood co-founder denies collusion with hedge funds at US Congress hearings"},"content":{"rendered":"<p>On February 18, members of the U.S. House Committee on Financial Services heard testimony from top executives involved in the GameStop stock saga. Lawmakers&#8217; focus was Robinhood, the crypto-friendly trading platform.<\/p>\n<p>At the end of January, the service halted trading in several assets amid the <a href=\"https:\/\/u1f987.com\/en\/news\/skybridge-capital-chief-calls-gamestop-stock-pump-a-positive-sign-for-bitcoin\">GameStop stock pump<\/a>. The move drew criticism from investors and regulators, who suspected Robinhood of colluding with hedge fund Melvin Capital and market-maker Citadel.<\/p>\n<blockquote class='wp-embedded-content' data-secret='OsLfPKeJzC'>\n<p><a href=\"https:\/\/u1f987.com\/en\/news\/robinhood-at-the-centre-of-the-gamestop-dogecoin-and-reddit-trader-scandal\">Robinhood has found itself at the centre of the scandal surrounding GameStop stock, Dogecoin and Reddit traders<\/a><\/p>\n<\/blockquote>\n<p><iframe loading='lazy' class='wp-embedded-content' sandbox='allow-scripts' security='restricted' style='position: absolute; visibility: hidden;' title='Robinhood angling into the centre of the GameStop, Dogecoin and Reddit traders scandal' src='https:\/\/u1f987.com\/news\/robinhood-privlekla-vnimanie-kongressa-ssha-posle-zapreta-na-torgovlyu-aktsiyami-gamestop\/embed#?secret=upv04ddWt1#?secret=OsLfPKeJzC' data-secret='OsLfPKeJzC' width='500' height='282' frameborder='0' marginwidth='0' marginheight='0' scrolling='no'><\/iframe><\/p>\n<p>During the hearings, co-founder and chief executive Vlad Tenev apologised for imposing a temporary ban on purchasing a number of securities.<\/p>\n<blockquote>\n<p>&#8220;Please know that we are doing everything we can to ensure this does not happen again\u2026 I am committed to making us better. We will learn from this situation and will not repeat the same mistakes in the future,&#8221; Tenev said.<\/p>\n<\/blockquote>\n<p><iframe loading='lazy' src='https:\/\/www.youtube.com\/embed\/shrkw-dV9S0' width='560' height='315' frameborder='0' allowfullscreen='allowfullscreen'><\/iframe><\/p>\n<p>He rejected claims that the restrictions were driven by an attempt to shield hedge funds. According to him, the company relied on heightened deposit requirements. In early February, <a href=\"https:\/\/u1f987.com\/en\/news\/robinhood-co-founder-explains-trading-halt-to-elon-musk\">a similar explanation<\/a> was provided by Tenev to Elon Musk, founder of Tesla.<\/p>\n<p>The GameStop rally proved costly for large players with short positions, notably Melvin Capital \u2014 it <a href='https:\/\/www.cnbc.com\/2021\/01\/31\/melvin-capital-lost-more-than-50percent-after-betting-against-gamestop-wsj.html' target='_blank' rel='nofollow noopener'>lost 53%<\/a> of capital in January. The hedge fund&#8217;s chief executive, Gabriel Plotkin, said the firm was not involved in the trading halt.<\/p>\n<p>Citadel&#8217;s top executive, Kenneth Griffin, gave similar testimony. In a written statement to the committee, he emphasised that the market maker &#8216;played no role&#8217; in Robinhood&#8217;s decision to restrict stock trading.<\/p>\n<p>Explanations were also provided by r\/WallStreetBets member Kit Gill. In a <a href='https:\/\/docs.house.gov\/meetings\/BA\/BA00\/20210218\/111207\/HHRG-117-BA00-Wstate-GillK-20210218.pdf' target='_blank' rel='nofollow noopener'>statement<\/a> he rejected manipulation allegations and noted that he did not impose his view on Reddit users.<\/p>\n<p>Lawmakers voiced concerns about Robinhood&#8217;s business model and its reliance on additional investments. On February 1, the service announced it had raised $3.4 billion from Ribbit Capital, CONIQ Capital, Andreessen Horowitz, Sequoia and Index Ventures.<\/p>\n<blockquote class='twitter-tweet'>\n<p dir='ltr' lang='en'>We\u2019ve raised $3.4 billion to invest in record customer growth. With this funding, we\u2019ll build and enhance our products that give more people access to the financial system. <a href='https:\/\/t.co\/4gcfY5PCBa'>https:\/\/t.co\/4gcfY5PCBa<\/a><\/p>\n<p>\u2014 Robinhood (@RobinhoodApp) <a href='https:\/\/twitter.com\/RobinhoodApp\/status\/1356286752768446475?ref_src=twsrc%5Etfw'>February 1, 2021<\/a><\/p>\n<\/blockquote>\n<p><script async src='https:\/\/platform.twitter.com\/widgets.js' charset='utf-8'><\/script><\/p>\n<blockquote>\n<p>&#8220;I believe there is an evident vulnerability in your business model,&#8221; said Representative Anthony Gonzalez.<\/p>\n<\/blockquote>\n<p>Tenev also rejected claims that Robinhood gamifies investing and disregards risks for its users. In December 2020, similar <a href=\"https:\/\/u1f987.com\/en\/news\/massachusetts-regulator-poised-to-file-suit-against-robinhood\">claims against the platform<\/a> were filed by the Massachusetts Secretary of the Commonwealth\u2019s Securities Division.<\/p>\n<blockquote>\n<p>&#8220;We do not treat investing as a game. We recognise that investing is serious,&#8221; the platform&#8217;s chief executive said.<\/p>\n<\/blockquote>\n<p>The Robinhood episode prompted former BitMEX chief executive Arthur Hayes to break his silence after the CFTC&#8217;s lawsuit. In a <a href='https:\/\/blog.bitmex.com\/walkaway\/' target='_blank' rel='nofollow noopener'>post<\/a> he urged stock-market traders to ditch brokers and stop &#8216;paying the system&#8217;.<\/p>\n<p>As an alternative, Hayes proposed trading in the cryptocurrency market.<\/p>\n<blockquote>\n<p>&#8220;Don\u2019t lose heart \u2014 the game is a game. You just need to know which one to play to improve your financial well-being for yourself and your family,&#8221; the former BitMEX chief said.<\/p>\n<\/blockquote>\n<p>Earlier reports from Deadline indicated Netflix planned to release a film about the showdown between Reddit\u2019s r\/WallStreetBets and Wall Street.<\/p>\n<p>Earlier reports suggested that Metro-Goldwyn-Mayer acquired the rights to adapt Ben Mezrich\u2019s forthcoming book about Reddit\u2019s war with hedge funds.<\/p>\n<p>Follow ForkLog\u2019s news on <a href='https:\/\/vk.com\/forklogcom' target='_blank' rel='nofollow noopener'>VK<\/a>!<\/p>\n<p style='margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;'><a style='text-decoration: underline;' title='View Hhrg 117 Ba00 Wstate Griffink 20210218 on Scribd' href='https:\/\/www.scribd.com\/document\/495138504\/Hhrg-117-Ba00-Wstate-Griffink-20210218#from_embed'>Hhrg 117 Ba00 Wstate Griffink 20210218<\/a> by <a style='text-decoration: underline;' title='View ForkLog's profile on Scribd' href='https:\/\/www.scribd.com\/user\/456422024\/ForkLog#from_embed'>ForkLog<\/a> on Scribd<\/p>\n<p><iframe loading='lazy' id='doc_268' class='scribd_iframe_embed' title='Hhrg 117 Ba00 Wstate Griffink 20210218' src='https:\/\/ru.scribd.com\/embeds\/495138504\/content?start_page=1&#038;view_mode=scroll&#038;access_key=key-1izXwxBSTKHn8FxFLtkP' width='100%' height='600' frameborder='0' scrolling='no' data-auto-height='false' data-aspect-ratio='0.7729220222793488'><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On February 18, members of the U.S. House Financial Services Committee heard testimony from top executives involved in the GameStop stock saga. Lawmakers focused on Robinhood, the crypto-friendly trading platform.<\/p>\n","protected":false},"author":1,"featured_media":36713,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1243,1156,1234,26],"class_list":["post-36712","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-gamestop","tag-institutional-investors-and-whales","tag-robinhood","tag-usa"],"aioseo_notices":[],"amp_enabled":true,"views":"20","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/36712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=36712"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/36712\/revisions"}],"predecessor-version":[{"id":36714,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/36712\/revisions\/36714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/36713"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=36712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=36712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=36712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}