Trading app Robinhood has restored a major outage that impacted trading in cryptocurrencies on its platform in the U.S. late Thursday.
“Crypto trading is now fully restored. Like others, we were experiencing unprecedented demand for Robinhood Crypto services, which created issues with crypto trading. We’ve resolved the issue and apologize for the inconvenience,” Robinhood said in a Twitter post and on its website.
Robinhood’s website had previously shown a post at 9:49 p.m. ET about the problem, and subsequent posts saying “we are continuing to investigate this issue.” All other functions on Robinhood remain operational, according to its website.
The outage occurred during a hot week for the likes of bitcoin, ethereum and other cryptocurrencies, which surged amid optimism surrounding Coinbase Global’s (COIN) - Get Coinbase Global Inc Report direct listing and on continued adoption of digital currencies as both a method of payment and store of value.
At the same time, commission-free Robinhood continues to face headwinds both from competitors and regulators, specifically in Massachusetts.
William Galvin, head of the Massachusetts Securities Division, said Thursday in an administrative complaint that Robinhood has “continued a pattern of aggressively inducing and enticing trading among its customers - including Massachusetts customers with little or no investment experience.”
Robinhood pushed back against Galvin on Thursday, filing a lawsuit seeking to quash the new state rule that holds brokers accountable for a fiduciary standard of care, which means putting customers’ interests above their own.
“By trying to bring Robinhood within the scope of the new rule, the Secretary violates the basic administrative law requirement that regulators define their rules clearly enough so that regulated entities can know what is expected of them,” Robinhood said, adding the new rule doesn’t apply to Robinhood as it is a “self-directed” brokerage firm that doesn’t make investment recommendations or provide advice.
In a blog post on its website, the brokerage added that it doesn’t “believe our customers are naive as the Massachusetts Securities Division paints them to be.”
Robinhood caught Wall Street and Main Street's attention in January after followers of a sub-reddit known as r/WallStreetBets launched a concerted effort to boost the shares of GameStop (GME) - Get Report and force a short squeeze.
The resulting volatility did indeed send the shares soaring, but also wound up catching many novice investors on the wrong side of trades as shares plunged.
The parent of Robinhood in late March filed confidentially with the Securities and Exchange Commission to go public.