Robinhood, the financial trading platform that is credited with enabling, and then inhibiting, the unprecedented increase in Gamestop shares, lifted all trade restrictions on Friday, allowing users to buy shares in companies promoted by Reddit after a week of financial turmoil.
The company was criticized by users after limiting the amount of Gamestop and AMC shares that individuals could buy after a Reddit-led increase in the share prices of certain companies. “There are currently no temporary limits to increase your positions,” said Robinhood in a statement on his website.
Robinhood only allowed users to trade 500 shares in GameStop, a chain of video game stores, and 5,500 shares in AMC, according to Reuters, after an initial increase in mid-January. The lifting of the restrictions came when the US Department of the Treasury reportedly started exploring the prevention of a similar set of events from happening again.
Robinhood was accused of protecting hedge funds, some of which pay the company to run its users’ trades when it introduced restrictions on purchases.
Thousands of small traders used Robinhood – which has positioned itself as a friendly platform for inexperienced investors – to buy Gamestop, AMC, Blackberry and other companies after sub-Reddit WallStreetBets inspired a mass trade event.
Politicians as ideologically diverse as Alexandria Ocasio-Cortez and Ted Cruz they criticized Robinhood, with Ocasio-Cortez suggesting a Congressional hearing for the company. But Robinhood said the restrictions are necessary to cover potential losses.
“With individual volatile securities accounting for hundreds of millions of dollars in deposit requirements … we had to take steps to limit the purchase of these volatile securities to ensure that we could comfortably meet our requirements,” said a statement on Robinhood’s website.
On Friday, Axios reported that Treasury Secretary Janet Yellen summoned regulators after the increase in Gamestop to discuss preventing expansion and retraction events in the past two weeks.
The government is exploring a crackdown on market manipulation and a tax on financial transactions, Axios said.