Robinhood Financial LLC has licensed by FINRA and has SEC approvals: and participates in the SIPC investor protection program; The company declares maximum investor protection of up to $500,000, subject to a cash limit of $250,000. There is no precedent for such guarantee payments yet. The Federal Deposit Insurance Corporation (FDIC) has insured deposits ranging from $250,000 to $1.25 million. The broker does not have a bank guarantor. There is no protection against negative balance.
Robinhood Crypto LLC does not have a FINRA license and does not participate in the SIPC program, which means that crypto-asset transactions have no guarantees. No matter how many "Investments in Cryptocurrencies with $10,000 or less are not insured."
Crypto-equity-brokerages let anyone buy up to $10,000 of cryptocurrency as long as they provide a brokerage account and a credit card. Only recently have the major cryptocurrency-focused platforms, including Coinbase, started to offer their own versions of "equity trading" in cryptocurrency. These firms were created with regulatory approval as brokerages, but the exchange they offer, like all exchange platforms, remains unregulated.
In June, the Securities and Exchange Commission [SEC] responded to concerns about the lack of transparency and clarity in the cryptocurrency market, and the lack of protection for investors. As part of this regulatory shakeup, it opened a special division, known as the Commission's Trading and Markets Division, to monitor and enforce trading, price, and securities trading laws in cryptocurrencies.
"We are committed to promoting market integrity, and protecting investors in the US," said the newly-created division head, Stephanie Avakian. "Cryptocurrencies, including digital assets such as bitcoin, have exhibited highly volatile trading activity that can have significant consequences for investors. As a result, the Commission has an obligation to
