Robinhood hits new low as FTX US and Bitstamp USA move into stocks

Crypto exchanges FTX US and Bitstamp USA are working on offering stock trading, which would be a further blow to Robinhood as its share price slumps to new lows.

FTX US President Brett Harrison tweeted on Tuesday that the crypto exchange is “hard at work on stocks,” commenting that a launch would be coming in “a couple months.”

This isn’t FTX’s first dalliance with stocks. Back in Oct. 2020, the global arm of the crypto exchange launched a feature to allow its customers to access fractionalized trading in tokenized stocks.

And Bitstamp USA CEO Robert Zagotta said in a Jan 14 interview with Bloomberg that the exchange is considering entering stocks, non-fungible tokens (NFTs) and crypto derivatives.

Offering low cost equities trading would allow the two crypto exchanges to attract a similar user base of meme stock style investors as Robinhood, which offers both crypto and stock trading.

The additional competition is unlikely to be welcomed by Robinhood ($HOOD) at this point. With meme stock and crypto trading cooling down, the American financial services company closed at an all-time low of $15.30 on Jan 13.

Related: Kraken CEO reverses $100K BTC 2021 forecast: Crypto winter now possible

Robinhood is approaching the market from the opposite direction to the two exchanges, beginning with stocks and moving into crypto. It’s been adding new features to its crypto service for some time, and plans to roll out the beta version of its crypto wallet feature this month. This will enable users to withdraw cryptocurrency from the platform.

One potential bright spot for Robinhood is interest from the Shiba Inu community. Shiba Inu Coin ($SHIB) has been pumping on rumors that it could be listed for trading on Robinhood as early as next month. The altcoin rebounded by nearly 30% in three days. However CEO Vlad Tenev has denied such reports on multiple occasions.


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ASIC targets pump and dump Telegram groups

The Australian Securities and Investments Commission (ASIC) is going after pump and dump groups on Telegram.

On Monday an account under the name “ASIC” posted a message in the “ASX Pump Organization” on Telegram to warn around 300 members of the group that “we’re monitoring this platform and we may be investigating you.”:

“Coordinated pumping of shares for profits can be illegal. We can see all trades and have access to trader identities. […] You run the risk of a criminal record, including fines of more than $1 million and prison time.”

Many of the group’s members assumed the account to be fake, however ASIC confirmed the validity of the now-deleted message to The Australian newspaper.

While some members of the community have laughed off the message from ASIC, others have vented their frustrations at being targeted instead of firms and corporate traders.

“What ASIC needs to do is go after the corporates who inside trade and short companies all the time, and not spend valuable time here hassling 300 small investors who are doing nothing wrong by sharing stock recommendations. This has to be the biggest joke in history,” a member wrote.

On Sept. 23 ASIC published a warning about a “concerning trend” of social media groups engaging in “blatant” pump and dump campaigns. It stated that “in some cases, posts on social media forums may mislead subscribers by suggesting the activity is legal,” before warning of prison sentences of up to 15 years and fines of more than $1 million.

“ASIC has been working closely with market operators to identify and disrupt pump and dump campaigns, and we will continue to target actions that threaten the integrity of markets and to take enforcement action where appropriate,” said ASIC Commissioner Cathie Armour as part of the release.

Crypto-based pump and dumps weren’t specifically targeted by ASIC, however a spokesperson for the regulator told Cointelegraph:

“The campaign is targeting listed stocks but the messaging is relevant for all financial products, including any crypto assets that may be, or involves, financial products.”

Related: New Australian crypto legislation likely in 2022, Senator Bragg tells NFT Fest

“Even where the activity relates to cryptocurrencies/products that may not be financial products under the Corporations Act, the pump and dump practice is concerning as it can lead to investor losses and create unnecessary price volatility,” the representative added.

Pump and dump groups have grown in popularity this year after the r/wallstreetbets and Robinhood saga in January. The Reddit group —which is admittedly more about the pump than the dump — collectively worked together to pump stocks that hedge funds were shorting against such as GameStop (GME) and AMC Entertainment (AMC).