Vlad Tenev, the CEO of Robinhood now speaks on retail investors following years of scrutiny due to the company’s role during the ‘meme stock’ frenzy.
He also states that this administration could help retail investors primarily due to its crypto and retail-friendly demonstration.
Tenev, alongside Robinhood, have been heavily scrutinized in the past when they prohibited retail investors from buying shares of GameStop (GME), AMC Entertainment (AMC), and others during the ‘meme stock’ frenzy of 2021.
The company said it did not have the liquidity it needed when these stocks were skyrocketing in price.
Robinhood received a massive waiver of its deposit requirement from the DTCC at the time.
Without this waiver, Robinhood would have defaulted on its regulatory collateral obligations.
NSCC officials said the waiver was necessary to avoid systemic risk to the market, though retail investors argue that overleveraged short positions is what led to unnecessary risks in the markets.
Robinhood and Citadel colluded the night prior to the trading restrictions, according to a report by the U.S. House Committee on Financial Services.
The DTCC waived a total of $9.7 billion of collateral deposit requirements on January 28, 2021.
Coincidentally, the Global Head of Operations at Citadel, David Inggs, also had a board seat at the DTCC.
Forward to today, Tenev seeks to lead in the ability to use crypto and invest in companies before they go public.
“I think there’s a big problem, which is that if you’re a retail investor right now, and you want to invest in [artificial intelligence] – it is very, very clear that they do, judging by the market activity yesterday and overnight on Sunday – you don’t have too many options,” Tenev said Tuesday in an exclusive interview on “The Claman Countdown.”
“The IPO process has gotten cumbersome.
Only the biggest companies can do it, and that limits opportunities and upside, too, to retail investors,” he continued.
“We now have an administration that’s crypto-friendly and retail-friendly, and we see an opportunity to fix this major problem.”
In a Washington Post opinion piece also published Tuesday, Tenev wrote that an ‘investing revolution is coming’, but that the U.S. isn’t ready for it.
“You have companies like SpaceX worth hundreds of billions [of dollars], companies like OpenAI and Anthropic that are off limits to investors,” the CEO pointed out to FOX Business’ Liz Claman.
“And the right solution is to open up access to these, sort of, previously accredited assets.
And I think we can do that in a way that makes sure that customers know what they’re putting their money into and self-certify that they understand the risks.”
When asked whether the rise of “meme” coins and tokens, like $TRUMP and $MELANIA, more recently, degrade the technical and fundamental value behind the currencies, Tenev responded by saying that it moves larger conversations and gives “the power” to anyone who wants to access a global market.
“The fact that it’s so easy and that someone with a computer can set it up and do it in a relatively short amount of time shows you that the technology is valuable.
And we just need the regulatory clarity to connect this crypto technology to real world productive assets that are currently regulated as securities,” he explained.
Robinhood’s customers tend to “buy the dip,” the CEO noted, and A.I. also represents the “next frontier” in what investors want to get their hands on.
“I think that just shows you the power of what can happen if private markets are open,” Tenev said.
“They’re private companies whose investors are limited to a very, very small circle of insiders that tend to invest in all of these deals.
So I think that the next frontier and democratization of retail investing is going to be making sure that these opportunities are open to retail investors.”
While many retail investors have lost trust in the company and its CEO, time will tell whether new opportunities can regain the confidence of these massive trading communities seeking protection over market manipulators.
Related: CFO of massive hedge fund will now serve 8 years in prison
Read Daily Market News for the latest in Business and the Financial and Capital Markets.
Follow breaking developments on X and Facebook.
About The Author
F^&K Vlad and Robinghood