The billionaire chief executive of investment platform Robinhood has called UK policymakers’ stance on cryptocurrency trading “backwards” compared to regulated forms of gambling.
Vlad Tenev, who co-founded the US firm in 2013, argued punters “should be allowed to do what they want” amid concerns that some forms of high-risk trading could become addictive.
In June, chief executive of NHS England Amanda Pritchard warned that trading within unregulated crypto markets was putting extra demand on the health service’s gambling clinics.
She called for regulatory action to stop young people becoming “hooked” on new types of trading, which have exploded in popularity in recent years and been made easily accessible by apps like Robinhood.
“I think people should be allowed to do what they want,” Tenev told The Sunday Times.
“But on a policy level, it’s just strange to me that, like: ‘the gambling will continue, but suddenly, with crypto and margin trading, we would have a problem with that.’ That just seems backwards to me.”
Margin trading is a risky form of investment which allows certain customers to borrow money from Robinhood to buy additional securities.
Following conversations with regulators that delayed its plans, Robinhood launched margin trading in the UK in October six months after opening its app to Brits.
In a March website post it later retracted, Robinhood said it could charge 12 per cent interest on the loans and offer the product due to a “regulatory exemption” meaning it would not be required to assess customers on whether margin investing was appropriate for them.
The feature now offers lower rates that range between 6.25 per cent for loans under $50,000 and 5.2 per cent for more than $50m.
Crypto trading has proven divisive among UK authorities, with the Financial Conduct Authority warning people for years that they should be prepared to lose all of their money if they invest in digital assets.
Last year, the influential Treasury Committee urged the government to regulate crypto trading as gambling. The Treasury rejected this recommendation, arguing it would put Britain at odds with international regulators and fail to mitigate risks from the sector.
“I was surprised when I went to the UK by just how much bigger gambling was than in America,” Tenev said. “Like, you can almost go into every street corner and sit down and gamble on sports.”
The launch of Robinhood UK in March was the company’s first step outside the US, after it shot to global infamy in 2021 as the central player in the so-called meme stock frenzy.
“It’s pretty clear that [British] customers love the product, and they’re looking to bring all of their financial activities to Robinhood,” Tenev said.
“We have the potential to really be people’s financial home in the UK market.”