Robinhood ordeal shows broken system and importance of regulation, crypto industry execs say

Robinhood ordeal shows broken system and importance of regulation, crypto industry execs say

In the past few days, some stocks like GameStop (GME) and AMC Entertainment (AMC) have risen dramatically in price, reportedly matching the attention of Reddit users buying in the face of selling pressure from big players. The popular Robinhood trading platform then began restricting clients’ ability to purchase multiple assets linked to the drama. When asked Richard Byworth, CEO of Crypto Exchange EQUOS, for his thoughts on Robinhood’s suspension of GameStop stock purchases, he pointed out the importance of freedom in the markets.

“It is always important to have free and transparent markets for all traders, and maintaining an open trading book that is available to everyone is the responsibility of all trading venues,” Byworth told Cointelegraph. “The GameStop problem and platform responses are likely to lead to more focus on crypto assets.”

On Jan. 22, a share of GME was priced at about $ 53, according to data. On January 28, GME hit a high of around $ 508 per share. In the hours following the peak, the asset fell back to around $ 113. Since then, GME has remained volatile in price, trading between $ 197 and $ 411.

“I think it’s a clear indication of how broken and fundamentally manipulated the traditional financial system is,” said Aleks Svetski, co-founder and CEO of Amber, a bitcoin investment platform, to Cointelegraph.

“This will set all false precedents and is one of the last nails in the coffin for the Main Street-Wall Street relationship,” he added. “The WSB folks will likely switch to Bitcoin next too, realizing that this is the only thing that cannot be turned off.”

The people believed to be responsible for the rising stocks are part of the Wall Street Bets subreddit, sometimes abbreviated to WSB. The cadre reportedly searched for stocks with high short selling interest and bought up stocks in those assets, causing price rallies, a CNBC article said Wednesday. Robinhood on Thursday suspended the purchase of certain related assets.

What impact could the suspension of Robinhood’s asset purchase have on the crypto space in the future? “Situations like this show why regulation is important and that there are orderly markets, equal access to information for all, and trading venues that give customers fair opportunities to trade, hedge and take a position,” Byworth said, adding:

“In cryptography, there have been some exchanges that haven’t provided this type of trading environment, and often it’s the customer who loses. It is the job of exchanges to provide a safe, transparent and compliant trading environment so that investors have access to markets that regulators and traders trust. At EQUOS we don’t trade against customers on our platform like most crypto exchanges and we don’t sell our customer data to high-frequency traders like many traditional brokers. “

The US Securities and Exchange Commission recently announced its intention to investigate the events of the past few days.

Stay in the Loop

Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

Latest stories

- Advertisement - spot_img

You might also like...