Robinhood Markets Inc is developing a new feature to help protect users from the volatility of cryptocurrency markets, according to reports.
The commission-free trading app is said to be creating a new “price volatility protection” mechanism, Bloomberg said, which could include the capability to skip recurring orders of crypto or buy less than the designated amount to reduce exposure to trading volatility.
READ: Robinhood's crypto division expects US$30mln fine from New York regulator
The feature was reportedly contained within the code of a beta version of Robinhood’s iPhone app, with the firm also said to be testing an option to allow users to purchase stocks with spare change through a ‘round up’ functionality.
The volatility protection feature may be an effort by Robinhood to shore up the confidence of its user base after rapid trading activity in crypto assets earlier this year resulted in several outages. The firm may also be looking to stabilise this part of its business, which accounted for around 17% of its revenues in the first quarter of the year.
Robinhood’s move may also form part of an effort to reassure investors ahead of its expected IPO on Thursday as well as reduce pressure on the segment from regulators after it was hit with a US$30mln penalty from New York’s finance watchdog last week as part of a settlement around alleged violations of the US state’s anti-money laundering rules, with a US$70mln penalty also issued from the Financial Industry Regulatory Authority (FINRA) for "systemic" failures, including issuing "false and misleading" information.
This week the company also disclosed that it has received inquiries from the US Securities and Exchange Commission (SEC) and FINRA to see whether employees traded GameStop Corp (NYSE:GME) and AMC Entertainment Holdings (NYSE:AMC) Inc shares before the online broker publicly announced it was restricting trading in those and other meme stocks on January.