Stock-trading start-up Robinhood has scrapped its move to become a US bank.
The Menlo Park, California-based firm said it will withdraw its bank charter application with the Office of the Comptroller of the Currency.
The firm, which provides commission-free stock trading through its app, said yesterday’s decision to pull its application is voluntary. It had submitted its paperwork to the Comptroller in April.
A spokesperson said: “Robinhood will continue to focus on increasing participation in the financial system and challenging the industry to better serve everyone.”
The news comes as Robinhood attempts to expand its footprint and the types of services it offers.
Checking account mix up
Earlier this month, the fintech said it would launch in the UK in the first half of next year, trading over 3,500 US stocks and 1,000 global stocks, without foreign exchange fees and account minimums, from as little as £1.
Last year, the highly-valued start-up ran into hot water with US banking authorities when it launched a checking and savings account with a 3 per cent interest rate.
But confusion over whether the Securities Investor Protection Corporation covered up to $250,000 of cash in these accounts, quickly led to the fintech re-launching and re-naming the product as a cash management account.
Robinhood was founded in 2013, by two engineers Vlad Tenev (pictured, right) and Baiju Bhatt (pictured, left) who built high-frequency trading programmes for hedge funds in New York, and has amassed more than six million customers. It raised $323m during a Serie E funding round in July, giving the trading app a $7.6bn valuation.