- Robinhood has raised $3.4 billion from shareholders so far to deal with the GameStop aftermath.
- The app is struggling to meet new NSCC capital requirements.
- Normal trading has yet to resume with some cryptocurrencies currently restricted.
Embattled trading app Robinhood has raised $3.4 billion so far to restore its trading services. Also, Robinhood CEO Vladimir Tenev had an interview with billionaire entrepreneur and Tesla CEO Elon Musk earlier this week.
In the interview, Tenev disclosed that the app managed to raise $1 billion earlier this week through its investors. The Wall Street Journal, however, reported that Tenev managed to raise a further $2.4 billion.
The trading app recently stopped some and limited other assets from trading. The app added the limits to meet the new NSCC fees. Earlier, the NSCC drastically raised the capital required to clear trades after a sudden surge in assets trading on the app.
The surge in trading resulted after Robinhood users started buying GameStop shares, causing the share price to spike. As part of the negotiations with the NSCC, Robinhood stopped trading GameStop shares, a move that earned it the ire of its users. The backlash forced the app to resume trading the shares, a move that was enabled through the first billion raised.
However, as users have continued to pump shares, including cryptos like DOGE and XRP, the app has struggled to cope. As a result, some shares, like Dogecoin, have been restricted. Although Tenev continues to justify the decision, Robinhood users are unhappy.
Users once praised Robinhood for its role in democratizing investing. Now, they accuse the app of market manipulation.
To avoid alienating further its user base, the trading app needs to raise enough funds to meet NSCC capital fees. Thus, this may enable free trade to resume on the app.