Posted In:

Capital Markets

The 'Unlimited Money' Cheat Code


Nov 09, 2019


Posted In:

Capital Markets


Nov 09, 2019



Robinhood was living up to its name this week – inadvertently giving money back to the people!

Some Robinhood Gold users took advantage of a glitch that saw one trader turn a $3k deposit into a $1.7m position through unlimited leverage. The glitch involved a trade that incorrectly added the full value of sold “super charged” options to the user’s cash pile, giving them more buying power.

Audacious users were able to repeat this trade with no limit, which spurred Reddit users to call this the “unlimited money" cheat code. In the end, only 20 cheeky users were able to pull off the trades, and it is estimated to have cost Robinhood less than $100k - a blip considering the fintech has raised more than $500m in venture funding.

But the real blowback for Robinhood might be in Washington D.C. This lapse will not look good in front of the SEC or FINRA as Robinhood is seeking a bank charter. This comes on the heels of another regulatory mishap when Robinhood falsely claimed their checking accounts where SIPC-insured.

Other fintech companies who are just adding brokerage capabilities are surely keeping an eye out to avoid the money cheat code – with Square’s Cash App adding zero-fee trading and fractional stock investing.

The traders could be in legal trouble too – with a Georgetown law professor saying that this could become a securities fraud case, with users needing to pay back all borrowed cash.

So it seems the old adage holds – money doesn’t grow on trees!

Portfolio News

FinTech Collective portfolio company Reonomy raised $60m Series D - New York based real estate analytics and database company closed a $60m Series D led by Georgian Partners, with participation from Wells Fargo Strategic Capital, Citi Ventures, and Untitled Investments. Fun Fact: FinTech Collective is a Seed investor and once shared an office with Reonomy. Read more

TradeBlock's the Hard Fork – weekly market commentary - In this week's edition, TradeBlock covers Genesis surge in crypto backed loan originations, Deribit's invalid liquidations, and Binance opening up a Beijing office as China changes its stance on digital currencies. Read more

Dawn of the neobank: the fintechs trying to kill the corner bank - Superb Forbes cover story about the trajectory of MoneyLion and its CEO founder, Dee Choubey, on its path to offer a complete, private bank for the $50k American household. Over time, the company has become a "product factory" that offers seven financial products, including paycheck advance and brokerage services. Read more

The 'Unlimited Money' Cheat Code

Robinhood glitch lets traders borrow unlimited funds to buy stocks - The mobile trading app that has more than 6m users is contending with a glitch in its platform that enabled some traders to "supercharge" their trades with unlimited borrowed money. Read more

Industry News

Square's Cash App sees revenue increase 115% from last year - Square's earning report for Q3 of 2019 showed the Cash App growing and monetizing. In Q3, total net revenue for Cash App was $307m. Read more

India’s Unified Payments Interface (UPI): breaking the billion barrier - UPI is closing in on a significant milestone: one billion transactions per month. In September 2019, UPI clocked 955m transactions, amounting to 1.61tr rupees (INR) or $23bn. Read more

Uber announces deeper push into financial services with UberMoney - Uber will be giving its 4m plus drivers around the world access to a mobile bank account so they can get paid after each ride. With 40% of Uber rides still paid for in cash, it is also likely contemplating a bank account for its nearly 100m consumers on the platform as well. Read more

A startup is cashing in on India’s $1tn gold stash - Indians stockpile more gold than citizens of any other country, and their hoard is 7x the amount of gold mined globally in 2018. Rupeek Fintech keeps transactions with customers discreet by coming to their home to pick up jewelry and heirlooms that they can borrow against. Read more

Plastics still matter to payments - For all the publicity on digital payments, most consumers still rely on good old plastic cards to transact - and someone has to make them! Now that Fiserv owns First Data, all of its plastic-card sales will be booked as revenue. Read more

China fears weigh on launch of Hong Kong virtual banks - Chinese entrants who sensed an opportunity to disrupt Hong Kong's financial centre are stuck in testing mode after winning licenses to enter market. One protester, an actuary in his late 20s, said “I don’t even go to pro-government restaurants, why would I go use a Chinese bank?” Read more

Crime agency gets record reports of suspicious financial activity - The UK’s National Crime Agency received a record number of reports flagging potential money laundering, terrorist financing and other suspicious financial activity this year. But only one in three reports resulted in a criminal investigation. Read more

Jail terms for 13 bankers over Monte Paschi scandal - Thirteen former bankers from Monte dei Paschi di Siena, Nomura and Deutsche Bank were sentenced to jail on Friday in Milan. Read more

Select Financings

Cover Genius - Sydney based insurtech for online consumers has raised $10m in a Series B round led by King River Capital. Read more

Deserve - SF based millennial credit card as a service startup has raised $50m in Series C capital from Goldman Sachs. Read more

Digital Debt Capital Markets - London based startup focused on the “electronification” of the bond markets has raised £2.5m in seed capital from a group of investors including Michael Spencer, the founder of trading technology firm Nex Group and formerly ICAP. Read more

Digits - San Francisco based financial visualization startup raised a $10.5m Series A led by Benchmark. Read more

Ebury - London based fintech company has raised £350m from Banco Santander, as Spain’s biggest bank seeks to win more business from SMEs that trade internationally. Santander acquired a 50.1% stake in Ebury, which operates in 19 countries. Read more

Extend - San Francisco based extended warranties-as-a-service startup raised $16.4m led by GreatPoint Ventures. Extend also acquired assets of warranty programs from Affinity Insurance Services, an affiliate of Aon. Read more

HMBradley - Los Angeles based challenger bank raises $3.5m seed round from Accomplice Ventures, Walkabout Ventures, Mucker Capital, Index Ventures, and angels like Max Levchin. Read more

Immo - London based real estate fintech platform closed a €11m Series A funded by Talis Capital and HV Holtzbrinck Ventures. In addition, the company raised over €60m in real estate “buyer capital.” Read more - San Francisco based insurtech startup closed a $1.5m Seed round led by West Loop Venture. Read more

Mylo - Montreal based saving and investing app has raised C$10 million in Series A funding led by National Bank. Read more

Papaya Global - New York based global payroll and payment management platform has raised $45m in Series B funding led by Insight Partners. Read more

Snapdocs - San Francisco based real estate tech company has raised a $25m Series B led by F-Prime with participation from Sequoia. Read more


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