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Crypto Trading Platform Robinhood Withdraws Bank Charter Application After Regulatory Challenges

Crypto Trading Platform Robinhood Withdraws Bank Charter Application After Regulatory Challenges

The cryptocurrency and stock trading platform Robinhood appears to be putting its dreams of becoming a bank on ice. This is at least the case if one is to believe a recent report. Specifically, Robinhood is said to be voluntarily withdrawing its application for a bank charter.

Is Robinhood canceling its bank plans?

This news broke in a report by CNBC on November 27th. According to it, Robinhood was withdrawing its bank charter application with the Office of the Comptroller of the Currency. 

For those unaware, the Office of the Comptroller of the Currency is a bureau within the US Department of Treasury. Furthermore, the office is in charge of regulating and supervising all national bank institutions in the US. As such, any and all actors looking to manage a “bank” in the United States need to go through this bureau.

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According to a Robinhood spokesperson, the cryptocurrency and stock trading platform is now dropping the application due to unforeseen complications. As such, the company says that “Robinhood will continue to focus on increasing participation in the financial system and challenging the industry to better serve everyone“.

Robinhood first applied for a bank charter with the US bureau back in April of this year. At the time, it was seen as a move that would bring it closer to offering traditional banking products and services.

Robinhood is “7th hottest US company to work for”

Moreover, many observers went on to speculate that this could bring cryptocurrency more into everyday financials. After all, some of those unaware or unsure of crypto would likely appreciate a traditional “bank” to guide them through purchases.

Furthermore, it was said that Robinhood’s full-service bank would operate alongside its mobile-centric trading division. As any users of Robinhood will know, the existing platform enables users to trade funds, crypto and options on their devices.

Nevertheless, Robinhood has seen significant regulatory scrutiny earlier this year. For example, the decision to rebrand the trading service’s name to “cash management” was met with criticism. Additionally, US politicians supposedly went so far as to accuse the trading platform of “failing to offer transparency” to its around 850,000 users.

Even despite this setback, however, Robinhood remains an attractive name in the cryptocurrency and trading business. Not long ago, LinkedIn went on to rank Robinhood as 7th on the “Hottest US companies to work for” list. This came after Robinhood got a regulatory approval from the UK’s Financial Conduct Authority.