Robinhood, a mobile-only online brokerage that charges commission-free trades, debuted in December 2014 with a waitlist of over 500,000 people. With over 10,000,000 users by the end of 2020, many people are beginning to wonder, ‘Is Robinhood safe?’ The company’s founders, Stanford physics graduates Vladimir Tenev and Baiju Bhatt, felt that their mobile platform would inspire a new generation of retail investors; they had a simple vision in their head that their mobile platform would be able to make financial markets more accessible by providing no-fee trades, no account minimums, and an easy-to-use mobile app.

Robinhood has turned the investment industry on its head. You may now buy a half-share or other fraction of your favorite stocks, such as Apple, Amazon, or Netflix. Even with this kind of offer, one cannot be sure of how much of their given information and services are reliable.
Is Robinhood Safe?
Yes, Robinhood is safe to use as an investment platform.

Robinhood is a legitimate and regulated brokerage firm that allows investors to trade stocks, ETFs, and cryptocurrencies without paying commissions. However, like any financial institution, there are potential risks involved in using Robinhood.
One potential risk is the possibility of account hacking or fraud. Robinhood has had security breaches in the past, and while the company has taken steps to improve its security measures, there is still a risk that your account could be compromised.
Another risk is the lack of access to customer support. Robinhood is primarily a self-service platform, which means that if you run into issues, you may not have access to immediate help from a customer support representative.
Additionally, Robinhood’s commission-free business model can be tempting for new or inexperienced investors, who may not fully understand the risks involved in trading. It’s important to remember that investing always carries some level of risk, and it’s important to do your research and make informed decisions.
Robinhood can be a safe and convenient platform for trading, as long as you take proper security precautions and educate yourself on the risks involved in investing.
Is Robinhood Regulated?

Yes, Robinhood is regulated by various financial regulatory agencies in the United States. As a brokerage firm, Robinhood is registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Additionally, Robinhood is a member of the Securities Investor Protection Corporation (SIPC), which provides insurance protection for customers’ cash and securities in case the company fails or goes bankrupt.
Regulatory compliance is an important aspect of the financial industry, and Robinhood must adhere to various rules and regulations set by these regulatory bodies to ensure the protection of its customers’ investments and interests.
Security Features of Robinhood
Robinhood utilizes a number of security features to protect its users’ accounts and data. Some of these security features include:
- Two-factor authentication (2FA): Robinhood requires users to enable 2FA, which requires users to enter a unique code in addition to their password each time they log in to their account.
- Encryption: Robinhood uses encryption technology to protect users’ sensitive information, such as login credentials and account details. This means that data is scrambled and unreadable to anyone who intercepts it.
- Secure Sockets Layer (SSL): Robinhood uses SSL to create a secure connection between users’ web browsers and their servers, ensuring that any data transmitted between the two is encrypted and secure.
- Biometric authentication: Robinhood allows users to log in to their accounts using biometric authentication, such as facial recognition or fingerprint scanning, which adds an extra layer of security.
- Fraud detection: Robinhood uses fraud detection technology to identify and prevent fraudulent activities on its platform.
- Account monitoring: Robinhood monitors user accounts for suspicious activity and will alert users if any unusual activity is detected.
Robinhood takes security very seriously and utilizes a variety of security features to protect its users’ accounts and data.
Controversies Surrounding Robinhood
Robinhood has been at the center of several controversies in recent years. Here are some of the main issues that have generated controversy around the platform:
- GameStop trading controversy: In January 2021, a group of amateur investors on Reddit coordinated a short squeeze on GameStop’s stock, causing its price to skyrocket. Robinhood, along with other brokerages, then halted trading of GameStop and other volatile stocks, which angered many users who accused the company of siding with Wall Street hedge funds.
- Technical issues: Robinhood has experienced several technical issues that have prevented users from accessing their accounts or making trades, including an outage in March 2020 that lasted for two days, preventing users from trading during a period of market volatility.
- Security issues: Robinhood has also faced security issues, including a data breach in 2020 that exposed the personal information of nearly 7 million users. Additionally, a number of users have reported that their accounts were hacked, sometimes resulting in significant losses.
- Regulatory issues: In December 2020, Robinhood agreed to pay $65 million to settle charges from the SEC that it misled customers about its revenue sources and failed to provide the best execution for trades.
These controversies have led to increased scrutiny of Robinhood and raised questions about its business practices, security measures, and overall trustworthiness as a platform for investing.
Final Verdict
All in all, Robinhood is safe to use despite its bad publicity and checkered past.
Content on Identitytheft.org is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Identitytheft.org is not a fiduciary by virtue of any person’s use of or access to the Site or Content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content on the Site before making any decisions based on such information or other Content. Please consult your own legal, tax, and financial advisers about the risks of investing.