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The SEC alleged that “misleading statements and omissions” had been made in how the company communicated to its customers. This concerned the fact that Robinhood would send customer orders to firms for execution and receive payment in exchange. Although one of the trading platform’s big selling points to customers was the fact that it is “commission free” — the regulator said the “unusually high” use of other trading firms meant that orders were often executed at inferior prices.
Even after the savings that users made from paying no commission were taken into account, the SEC estimated that its customers ended up missing out on $34.1 million. As SEC official Joseph Sansone noted: “Robinhood failed to seek to obtain the best reasonably available terms when executing customers’ orders, causing customers to lose tens of millions of dollars.”
At the time, the company told Cointelegraph that “the settlement relates to historical practices that do not reflect Robinhood today.”
Are crypto-powered platforms an alternative?
Quantfury says it is aiming to solve the issues seen with centralized trading platforms by offering commission-free trading and investing — giving people access to real-time spot prices from global crypto exchanges with zero fees.
The platform offers stocks, cryptocurrencies, exchange-traded funds and futures — adding that it is driven by a determination to be transparent and honest. Quantfury’s trading data is digitized and published anonymously using a smart contract, meaning that the authenticity of volumes on its platform can be easily verified.
According to the brokerage, it also offers a broader range of features — enabling users to go long and short, benefit from guaranteed execution, and fund their account balances in crypto of their choice.
Leveling the playing field is an issue that Quantfury’s founder Lev Mazur is passionate about. In an article setting out the truth behind retail trading, he wrote: “Billions of dollars are being lost daily by simple folks globally to hazardous trading platforms, whose only goal is to churn and burn their users with manipulated asset prices, as well as both visible and hidden fees.”
Over the past two years, the company says that it has ensured that its users, who call themselves Quantfurians, are not put at a disadvantage — enabling them to be masters of their own fate.
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