So last week, on Thursday April 15th and Friday April 16th, Robinhood had some system malfunctions or whatever and prevented the trading of Cryptos, specifically Doge coin.
So here is their blog statement;
Looks like something sketchy is happening at Robinhood;
I mean, how do they have a platform that can handle Billions of volume of stocks, and not hand millions of volume of crypto?
Additionally, if they were actually dealing in Crypto, through the Crypto exchange, there wouldn’t be any issues with Robinhood. Because then everyone would have those issues. So this leads me to believe that Robinhood isn’t working directly with Crypto.
A further look into their Crypto disclosures;
Besides this picture;
They can round your trades, which is a bit standard for disclosures on trading assets. However, Robinhood has a history of Payment for order flow and having your trades be sniped on Stonks. So a less regulated Crypto, means you probably are getting a shit deal. Probably.
They also have a liability clause in their disclosure to say that they ain’t to be blamed for downtime;
Which they can also cancel your orders during such downtime;
Their Disclosure also says too much
If they ended that last sentence with the Benefit of RHC or Robinhood, then that would be a fair statement. However, they slapped a Customers on it. So in theory, they could still do the following;
Loan, Hypothecate, pledge, or encumber Cryptocurrency Stored and held by RHC
in one of more omnibus Cryptocurrency wallets for the Benefit of RHC
You see what happened there? It’s like they said they won’t do something specific, but allows them to do something more generalized.
Oh, also, if Crypto gets banned and lawsuits start a-coming, Robinhood Crypto gets to throw your ass under the bus. Lmao. So much for decentralized finance.
And for the icing on the cake;
You have 30 days to informally resolve it, and you can’t sue via trial by jury or class action. LMAO.
This is pretty slick, because if you read deeper, it’s just a big fuck you. I’m not allowed to practice law, so it’s pretty standard fuck you if you ask me.
Also you have to appeal through San Francisco courts and whatnot. So If Robinhood has a hand in that court room, you’re probably not going to win. Which also implies that they might appeal to that court room, lmao.
Hey, if you really want to sue, lawyer up. But you should probably not be doing crypto to get rich if you already have the money to sue. But hey, that’s just me speaking out my ass.
It turns out, You don’t directly own doge coin or any crypto. Yea, this totally defeats the purpose of crypto as a real asset. But if you’re in it for trading to make money like a gambler, than I guess you’re in the right place.
Oh wait, there were those trade issues, so maybe not.
So Robinhood Buys coins and puts it in their hot wallet. While allowing you to trade ‘fake coins’ in a separate pool tethered to their hot wallet. This pool is called a ‘cold wallet’. I say ‘fake’ because there is no real transaction from wallet to wallet on the crypto ledger, so it’s a separate liquidity pool that reflects the value of the market. Much like stonks in general with Supplemental liquidity pools.
However, the fact that the cold wallet reflects prices MAY NOT be exact, means that there is some possible issues;
- You don’t own your crypto or have the ability to transfer it
- Your buy and sell orders have a time delay to affect the real market. Meaning you buying and selling affects the cold wallet, which then has some set amount of time before buying and selling on the real/hot market of crypto. This delay means that your trades don’t directly correlate with the actual price of Doge Coin.
- In theory, this could result in more ‘synthetic coins’ being held on Robinhood’s Cold Wallet than they actually have in their hot wallet. Which would imply that you don’t actually own anything, that Robinhood is short on Doge Coin, and that you buying Doge Coin on Robinhood would possibly not influence price whatsoever. (which is the point of supplemental liquidity pools, but in crypto, you’re only shooting yourself in the foot by over regulating yourself and de-throttling your price tracking for volatility)
- If the previous point is accurate/true, that could mean that a ‘circuit breaker’ tripped internally to prevent the SELLING of Doge Coin, meaning that Robinhood has, once again, LIQUIDITY ISSUES. Meaning they don’t have the free cash flow to pay out Doge Coin holders if the price of the coin actually goes up to the moon. (we’ll probably see more issues if Doge Coin goes up to 1 Dollarino)
- If there are liquidity issues, then who the fuck is insuring Robinhood? It’s not trading stonks, so it ain’t the fed bois, the DTCC, or any clearing house. So if there are liquidity issues from the coin jumping up in value, then there might be a potential for the end user, the retailers, to be left holding a bad of worthless not-even-real-coins. Lmao, no insurance there buck-o.
- The price mismatch with Doge Coin from their cold wallet to the hot wallet, means that there is a chance for Robinhood to skim trades off each transaction, much like a High frequency trade (HFT) on their internal systems. Robinhood has been caught already for PFOF in December 2020, a barely regulated Crypto market probably doesn’t have the consumer protection that stonks do. And even if they did (which they don’t because XRP and Crypto not being a Security is a thing and an on-going battle) then Robinhood has a track record of violating it anyway. Basically, you are highly probably getting a shit deal which they’ll say is due to ’rounding’ or ‘downtime’ issues or some shit.
- The previous point means that you probably are getting scammed on your trades. Probably.
- Did I mention that you don’t own your coin and you’re highly probabilistically getting scammed on your trades? Like if that isn’t enough to convince you that Robinhood is a bad bet, then you should donate all your money to me. It would net more returns in the long run to be honest.
If my pet theory is true, then Robinhood pays users fake synthetic coins at no cost to them, to take your money, at the same time they scam you on the trade with price mismatch, they also are not required to benefit the retail investor because there are little to no regulations on this, and the retailer gets fucked thinking they helped Doge Coin when they didn’t.
Basically, (if true) Robinhood is suppressing the price of Doge Coin because they are facing liquidity issues among other things.
Robinhood is again, not for the people.
Robinhood MIGHT be facing Liquidity issues (Still? Technically?)
If you are pro-doge coin, you should probably not trade on Robinhood as of writing, and you should own your own fucking Crypto Wallet. It defeats the purpose of crypto to be doing shit like this.
I am barred from giving financial or legal, diet, medical, life, talisman, or any advice in about five states (Give or take ten states). So I can’t say what you should or shouldn’t do, but for the love of the Entropic Death of the Universe, please be a little smart (or at least less retarded) about this;
*Not Valid Financial, Legal, Life, Talisman, Shamanic, Druidic, Auguric, or Any Advice
Complete side note,
Apparently there are more buy issues on Robinhood’s Stonks side of the house as of April 19th 2021;
UPDATE May 4th, 2021;
Lmao, so Robinhood faced more issues when the coin (Doge) jumped above 50cents;
Weird how an crypto treated like an asset goes up by pennies and all of the sudden Robinhood stops working. Man if that happened to any stock that jumped by a few pennies, no one would be using Robinhood. Just saying.
Some people aren’t happy and are also connecting the same dots as I am;
and people are up in arms(memes);
Arguably, ‘arms’ in ‘information warfare’ would be memes, as memes spread ideas and concepts.
So Memes, in essence, would be an attack at someone’s character. . . Or atleast a revelation of truth in this case, so it’s less of an attack and more of proliferation of reality. In defense of the memes.
Anyways, they got it ‘fixed’
As always, You’ve been warned.
*Not Valid Financial, Legal, Life, or Any Advice
UPDATE MAY 8th, 2021;
Hey-zeus fucking Cross-t
Apparently they (the hood) fucked up again. Again.
So, Lord Elon Musk Chan got on Saturday night live and called Doge a ‘hustle’ and apparently that shook some paper hands. This resulted in panic selling or something, and Robinhood once again broke down.
Don’t worry, it’s good that they’re promoting the coin. . . Jokes;
Anyways, if you want to invest in Doge, Kraken has an option. So that’s a thing. Lmao.
Please for the love of all things, stop with this charade of ‘crypto’ if you’re going to use Robinhood.
*Not Valid Advice unless you want to stick your dick metaphysically in 5th Dimensional Box Spreads and Guhs