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Robinhood users exploited an “infinite money cheat code” to basically give them free money
The people that exploited the app should probably lawyer up.
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Bloomberg reports that this morning, Robinhood gave its users permission to start trading stocks with seemingly unlimited money.
Sounds awesome, huh? This was, in fact, a huge glitch in the Robinhood Gold subscription, but that didn’t stop the app’s users from utilizing the “infinite money cheat code.” The Gold subscription allows Robinhood users to use margins in order to embellish the buying power with little to no regulations.
On the WallStreetBets Reddit page, one user claims to have a stock worth $1M after a $4K deposit, through the Robinhood bug. Another user, who confirmed this in a video, turned $2K into $50K.
Free money on Robinhood? That sounds too good to be true.
This is all, of course, illegal. If someone starts trading stocks with extra high margins, or unlimited leverage, they can be found guilty of a federal crime. Georgetown University law professor Donald Langevoort explains what could come for Robinhood users utilizing the glitch.
“If there’s an element of deceit, that you got this by exploiting a loophole in a system, I can see how that could become a securities fraud case. The other possibility is just the basic common law of restitution. If you take advantage of someone’s mistake to line your own pockets, you need to pay them back.”
The company is aware of the ongoing problem and is, as of this writing, is trying to get in touch with customers in an attempt to isolate the issue. There are no reports of who or what caused this glitch to happen. At least one user who had used the glitch has already had the money removed from the account and you can watch the whole thing on YouTube.
This is speculation, but Robinhood might have to rethink what someone can do with a premium membership. Probably something that doesn’t involve the risk of committing a federal offense… but that seems a bit too obvious.
What do you think should happen? Both to Robinhood and the users that used the exploit? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.
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