The US-based investment app Robinhood recently came under fire after a customer killed himself. The company may now be planning to delay its UK launch indefinitely as it struggles with political pressure at home soil.
Robinhood under fire
Robinhood is a popular investment app that works on the zero-commission model i.e. customers do not have to pay a transaction fee for every trade they make. Their offering revolutionized traditional broker-dealer business and forced other companies to do the same. The platform claims to be working on “democratizing finance” for millions of new traders. It aims to open up ways for them to buy and sell financial products without depositing a minimum sum or paying a commission to brokerages.
However, a 20-year-old student named Alex Kearns’ suicide has brought the company after the fire. He killed himself last month after he apparently thought that he had lost $730,000 on the app.
UK business in trouble
Robinhood planned to launch in the UK with much fanfare and already has a waiting list of over 250,000 people who want to join their platform. Recently the company sent an email to the waiting list and said that its plans may be delayed because of scrutiny into its business in the US. It wrote,
“We’re saddened to share that we’ve made the difficult decision to postpone our UK launch indefinitely. We’ll be closing our waitlist and taking down our UK website shortly.”
“On a company level, we’ve come to recognize that our efforts are currently best spent on strengthening our core business in the US and making further investments in our foundational systems.”
The firm further noted that it will continue working on democratizing finance even if their plan for global expansion.
The company received the Financial Conduct Authority (FCA) provided the company green signal to enter the British markets last year. However, the firm missed its initial plan of launching the offering in spring. The company may move some of its employees to move to the US. Wander Rutgers will continue to handle a skeleton team in the UK.