Robinhood allows people to buy a minimum of 1 Dogecoin instead of 10 after the meme currency’s gains jumped more than 8,700%

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Robinhood said on Tuesday that it would lower its minimum Dogecoin order size to one coin from 10 coins as the meme-based asset’s popularity rises rapidly.

Investors can also place smaller orders of bitcoin and ether, the company said in an update.

“Much happy! Very day! We’ve lowered the minimum order size from 10 $DOGE to 1 $DOGE. You can now build up your doge empire one coin at a time,” Robinhood said in a tweet. “We’ve also lowered the minimum order size for $BTC (0.000001) and $ETH (0.0001) so it’s easier for anybody to invest in crypto.”

Bitcoin’s previous minimum order on the brokerage was 0.0001, while ether’s old minimum was 0.001.

The trading app describes Dogecoin as a “playful take” on cryptocurrencies. “It’s typically used in online communities to ‘tip’ users for content that’s particularly witty or useful. It’s also become a popular cryptocurrency for donating to charities,” Robinhood says of the meme currency.

The digital asset recently hit a peak of $0.41, taking its year-to-date gains to more than 8,700%. But it was trading 21% lower, at $0.30, on Wednesday.

After Dogecoin hit its all-time high, Robinhood experienced a major trading outage that made it impossible for investors to join the rally. That instance mirrored GameStop’s rise in January, when traders were unable to get in on its booming stock as demand skyrocketed.

“Robinhood is a repeat offender here,” said Richard Smith, CEO of the Foundation for the Study of Cycles. “They are trying to be all things to all people. They are like Uber in the early days where their attitude is, ‘Who cares if we break a few things as long as we keep growing engagement.'”

Smith added: “Breaking a few things in the taxi business is one thing. Breaking a few things in the highly regulated retail financial services industry is something else.”

Robinhood said that the interruptions to trading were unacceptable but that heightened interest in crypto could continue to cause service interruptions.

Dogecoin was created as a joke in 2013, based on a meme.

“Whilst it has some limited practicality as a way of micro-tipping posters on internet forums, its rise has probably very much due to personal amusement reasons in the internet meme culture, recently spurred on by a playful Elon Musk on Twitter,” said Alex Joshi, a behavioral-finance specialist at Barclays Private Bank.

Joshi said that when the price of an asset rises so spectacularly in a short period, investors get lured in with the prospect of getting rich quick. “When you add in rapidly growing numbers of people buying because they see everyone else buying and making extraordinary returns, speculative herding behaviour really takes off, leading to vast numbers entering the market at extremely high price levels,” he said.

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Robinhood pays $65 million to settle SEC probe over misleading communications with customers

  • Robinhood agreed to pay $65 million to settle with the Securities and Exchange Commission over charges that the brokerage misled clients on its revenue from trades and the quality of its service.
  • The SEC alleged Robinhood made “misleading statements and omissions” about how it made money with market-makers. Robinhood, like other brokerages, sells its orders to high-speed trading firms for execution.
  • While Robinhood marketed its trades as commission-free and matching or exceeding its peers in quality, the brokerage provided inferior trade prices that cost clients tens of millions of dollars, according to a Thursday SEC press release.
  • The settlement relates to practices “that do not reflect Robinhood today,” Dan Gallagher, the brokerage’s chief legal officer, said in an emailed statement.
  • Visit the Business Insider homepage for more stories.

Robinhood agreed to pay $65 million to settle Securities and Exchange Commission charges that allege the discount brokerage misled customers on the quality of its trading service.

The regulator argued Robinhood made “misleading statements and omissions” about how it made money with high-speed trading companies, according to a Thursday press release. Like other brokerages, Robinhood sells its orders to trading firms for execution in a process known as “payment for order flow”.

The SEC’s order alleges the brokerage routinely provided inferior trade prices, even as¬†Robinhood marketed its trades as commission-free and executed with quality that matched or beat peers. The second-rate prices have cost clients a total of $34.1 million even after accounting for the lack of commission fees, according to the SEC.¬†

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“Robinhood provided misleading information to customers about the true costs of choosing to trade with the firm,” Stephanie Avakian, director of the SEC’s Enforcement Division, said in a statement. “Brokerage firms cannot mislead customers about order execution quality.”

The settlement ends a probe that examined Robinhood’s omission of order-flow revenue on its website from 2015 to 2018. Robinhood resolved the probe without admitting or denying the SEC’s charges.

The settlement relates to practices “that do not reflect Robinhood today,” Dan Gallagher, the brokerage’s chief legal officer, said in an emailed statement.

“We recognize the responsibility that comes with having helped millions of investors make their first investments, and we’re committed to continuing to evolve Robinhood as we grow to meet our customers’ needs,” he added.

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