What a difference makes a changing regulatory environment.
Approximately nine months after suggesting that a young copies trade platform could only work because it flew “under the radar” of the regulators, Robinhood has announced its own entry to the space with “Social Robinhood”, a new feature that will allow users to follow and manually replicate the prominent investor shops.
The measure represents the surprising face of the online broker, which has been a cautious historical bone on the characteristics that could attract regulatory scrutiny. The famous company launched its celebration Digital Confeti It works before its IPO of 2021 after the regulators raised Conerns on the trade of gamifications, which makes its adoption of the copies trade, another potentially gamified characteristic, even more notable.
This caution was on complete exhibition in December, when I was in a Conversation with this editor About the copies negotiation platform above, Robinhood’s CEO, Vlad Tenev suggested that such platforms could operate mainly because their smaller size, proposing that “copies trade could be a great interest for regulators and that Scholarsy ingested and that beheding and that scholarship and that matter of oxen.”
Now, Robinhood is betting that the regulatory panorama has changed enough to safely enter the copies negotiation market.
The moment is particularly notable given the pointed criticism that Robinhood faced earlier this year of the 23 -year -old founder of Dub, Steven Wang, who has positioned its platform as a more educated alternative to traditional commercial applications.
“I have a lot of respect for what [CEO] Lobby [Tenev] He has done it to do the trade for free ” Wang told me In February. “But at the end of the day, make it very easy to trade without expert orientation, without education, it is really a game for the broader population.”
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Wang has constantly argued that the DUB approach, which includes risk scores, risk -adjusted yields and portfolio stability metrics, representatives of a safer alternative to platforms such as Robinhood. In his conversation with Techcrunch, Wang also criticized Robinhood’s decision to sacrifice meme coins such as Trump, saying that the incentives are “misaligned among these large platforms that are public companies that now need to earn money.”
Tuesday news, announced at Robinhood’s Company event Early in the day, remembered the possibility that Robinhood has acquired, in fact, Dub, which was officially launched last year and has raised so far $ 47 million In investor funds. But he came to comment, a Robinhood spokesman replied by email: “No, this is not an acquisition, we are building our platform in Robinhood.” A request for comments from Wang was not returned at the time of publication.
The Robinhood version of the copies trade differs significantly from platforms such as DUB and players established as Etoro, which has sacrificed the commerce of copies to users for years Copytrader Feature. While Etoro allows the automatic copy of the portfolios of other merchants in real time (with US users limited to other US merchants only due to regulations), DUB allows users to automatically copy complete full portfolios for a monthly subscription of $ 10, and Social Robinhood will require that users manually replicate the operations, a distinction that can help to address the Regulatory Conerns.
The platform, which will be launched at the beginning of next year, will have verified merchants and will show the activities of famous investors and members of the Congress. Unlike informal copies trade that occurs on social networks, Robinhood will require identity verification and real portfolio positions. The plan, according to the company, is to first invite 10,000 social users of Robinhood to test the service before implementing it more widely.
The launch comes at a time when the regulatory landscape is evolving rapidly. Cryptographic companies were largely analyzed under the Biden administration, while numerous cryptographic companies have become companies that are quoted in the stock market in recent months, their path relieved by the crypto-friendly position of the Trump administration. Meanwhile, copies trade, much common in Europe but very restricted in the United States, may finally be gaining acceptance.
Seen through that lens, Robinhood’s entry into commercial copy representatives more than just another features launch; It could indicate the opening of gates for a wave or new platforms. If Robinhood can successfully negotiate the legal landscape that has long limited the trade of copies in the US., It seems that other Fintech sets do the same. ETOROS Successful May opowhich raised $ 310 million and saw that the shares increase 29% in their debut, has already demonstrated a strong appetite of investors for copies negotiation platforms.
It is an open question if this potential wave is good or bad for retail investors, or will serve mainly to boost Fintech’s valuations, it is an open question. For now, Robinhood’s shareholders are probably the clearest winners.
