- Robinhood limited the accounts to users who exploited an "infinite influence" error, and a leaked letter describes how the company notified participating traders.
- The company confirmed the legitimacy of the notification but could not comment on whether all users received the same letter.
- The notice describes three alternatives the trader can use to liquidate assets and states that any "negative equity balances" must be repaid within 60 days.
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Robinhood limited the accounts to users who exploited an "infinite influence" error, and a leaked letter sent to a closed merchant revealed how the company was announcing account continuations.
A Robinhood spokesperson confirmed the legitimacy of the notification, but could not comment on whether all users received the same letter. [1
- make an automatic transfer of customer accounts from another brokerage service
- request an automatic transfer to a bank linked to their Robinhood account
- request a written check to an address which is registered.
The note adds that the user's account is limited to only closing trades. Businesses with a "negative equity balance" should satisfy the debt before the accounts close in 60 days.
Read the full letter below. Personal information is redacted:
The hack was first discovered by members of r / WallStreetBets subreddit after a trader made a $ 2,000 deposit into a $ 50,000 position. The trade means that users sell call options with money borrowed through Robinhood Gold. The app then incorrectly added the value of the sold options to users' cash and allowed them to repeat the trade without clear limits.
A spokesman for Robinhood said Thursday that the company closed the loophole and implemented a "permanent update" to "prevent anyone from participating in this pattern of trades."
"We will continue to monitor closely for any form of violent activity on our platform and will take action where appropriate," the spokesperson said.
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