Robinhood to allow crypto deposits and withdrawals

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Written on Feb 18, 2021

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Users will be able to deposit and withdraw their crypto assets on the platform when the feature is enabled.
Robinhood said the company doesn’t invest in cryptocurrencies and won’t use customers’ funds for its benefit.
The company has been under investigation after the GameStop incident early last month.

Stock brokerage app Robinhood has announced plans to start accepting crypto deposits and withdrawals on its platform. According to the announcement, it will allow crypto users on the platform to transfer crypto-assets such as Bitcoin (BTC), Ethereum (ETH), and other coins.

As a major crypto platform, our actions need to be systematic, objective, and derived from first principles. We’re working on the ability to deposit and withdraw all cryptos. We’ll keep you updated as we progress.

— Robinhood (@RobinhoodApp) February 17, 2021

“We fully intend to provide the ability to deposit and withdraw cryptocurrencies, the company stated.

Crypto deposits and withdrawals now enabled

Robinhood has supported some crypto assets on its platform in the past. Some of these cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), and Dogecoin (DOGE).

But users were only allowed to use fiat currencies to buy crypto assets and sell them back. The feature was similar to what PayPal has enabled for crypto transactions.

Before now, there was no option for any deposits or transfers directly on cryptocurrencies to preferred external wallets. But Robinhood has laid out plans to enable the option, just like crypto exchanges.

Robinhood still under scrutiny by Congress

The news is coming after the platform received backlash for its refusal to allow users to buy certain crypto assets on its platform.

The GameStop incident in January affected the company’s reputation, as it was accused of shutting down the trading on some highly volatile stocks. Trading on stocks like AMC and GameStop was stopped by the company.

Congress has started investigating the issue, and Robinhood and other companies like Citadel Securities and Melvin Capital have been summoned to explain what happened. Several hedge funds were hit financially when the stocks escalate. Melvin, in particular, lost 53% of its $12.5 billion in assets during the price upscale. Robinhood also stated that cryptocurrencies will be custodial by its wallets, adding that the firm doesn’t engage in crypto investments and won’t use customers’ funds for its benefits.