What To Know About The Robinhood Hack

Bloomberg reports Robinhood has seen 2,000 accounts hacked, as brokerage firms become a big target of the dark web.

What To Know: Last week, Bloomberg revealed a hack on Robinhood accounts. At that time, Robinhood referred to a “limited number” of accounts that had been breached.

“We always respond to customers reporting fraudulent or suspicious activity and work as quickly as possible to complete investigations,” the company said in a statement to Bloomberg. “The security of Robinhood customer accounts is a top priority and something we take very seriously.”

A source told Bloomberg that a Robinhood internal probe reveals an estimated 2,000 accounts hacked.

Related Link: Robinhood Considers Bringing Back User Trading Data

Why It’s Important: Customers have complained on social media about their Robinhood accounts. One highlight has been the fact that Robinhood does not have a phone number for its customer service.

CNBC reported this week that brokerage account log-ins are being targeted on the “dark web.” The report revealed Robinhood accounts were fetching the highest prices, which could suggest they are easier to break into.

Robinhood has 13 million customer accounts, according to its latest report. The company gained over 3 million new accounts in the first few months of 2020 as more retail traders are investing in the markets for the first time.

Robinhood has been one of the pioneers of zero commission trading for retail investors. A security flaw like this and the lack of customer service responses could lead to higher churn. Rival companies could highlight their better security and try to lure Robinhood customers away.

What’s Next: Robinhood sent push notifications to users encouraging setting up two-factor authentication on accounts.

Robinhood is considering adding a phone number for its customer service department. The company said it will work quickly to secure the holdings of customers.