The Robinhood stock exchange start-up has abandoned its plans to become an American bank.
The Menlo Park, Calif., Based company has announced it will be withdrawing its Bank request for a charter from the Office of the Comptroller of the Currency.
The company, which offers commission-free stock trading through its app, said yesterday’s decision to withdraw its app was voluntary. He had submitted his documents to the comptroller in April.
A spokesperson said, “Robinhood will continue to focus on increasing participation in the financial system and on the industry challenge to better serve everyone. “
The news comes as Robinhood tries to expand its footprint and the types of services it offers.
Verification of account confusion
Earlier this month, the fintech announced its launch in the UK in the first half of next year, trading over 3,500 US stocks and 1,000 global stocks, with no foreign exchange fees or account minimums, from just £ 1.
Last year, the highly valued start-up clashed with US banking authorities when it launched a check and savings account with an interest rate of 3%.
But confusion over whether the Securities Investor Protection Corporation covered up to $ 250,000 in cash in these accounts quickly led to the fintech revival and the product being renamed as a cash management account.
Robinhood was founded in 2013 by two engineers Vlad Tenev (photo, right) and Baiju Bhatt (photo, left) who built high-frequency trading programs for hedge funds in New York City, and racked up more than six million customers. It raised $ 323 million in a Serie E funding round in July, giving the trading app a valuation of $ 7.6 billion.