Bermuda Post

Friday, Mar 29, 2024

Robinhood's CEO rejects his app allows for the 'gamification' of investing, and denies using rewards and confetti animation to encourage trading

Robinhood's CEO rejects his app allows for the 'gamification' of investing, and denies using rewards and confetti animation to encourage trading

"Even though we have made investing easier, we recognize it is not a game," Tenev said in his testimony ahead of a Congressional hearing.
Robinhood CEO Vlad Tenev rejected claims his app allows for the "gamification" of investing.

Tenev, in his newly released testimony ahead of a Thursday Congressional hearing into January's GameStop trading frenzy, said Robinhood has made investing easier for a broader range of people. Tenev and his co-founder Baiju Bhatt said they created Robinhood, a commission-free investing site, to "democratize" finance.

"Even though we have made investing easier, we recognize it is not a game," Tenev said in the testimony.

Several industry experts and investors said the app takes advantage of its young and inexperienced user base by encouraging risky trades. A game developer previously told Insider Robinhood's use of free gifts, rewards for bringing in new users, and glowing colors can deepen users engagement and relationship with the app.

Regulators are also examining whether a "gamified" product design leads Robinhood users to make risky trades they don't fully understand.

The consequences of risky Robinhood use can be disastrous, some users said. One user told The New York Times he took out two home equity loans to buy and sell options, but ended up losing thousands of dollars. The parents of a 20-year-old who died by suicide after thinking he lost $730,000 filed a wrongful death lawsuit against Robinhood earlier this month.

According to Tenev's testimony, Robinhood has encouraged investing among young people, people of color, and first-time traders. The median age of Robinhood users is 31 and half of customers identify as first-time investors. Black and Latino users represented 9% and 16% of Robinhood customers, respectively.

Robinhood makes money through payment for order flows, or by taking the buy and sell orders that users place and selling them directly to large trading firms. The business model means Robinhood benefits the more users make trades.

One December 16 complaint filed against Robinhood claims the company used visual strategies, including confetti celebrations, when users make trades, to "gamefy" trading and encourage repetitive use of the app.

Tenev said in his testimony the app uses confetti animation "sparingly" to celebrate milestone events. He denied that Robinhood used levels or rewards to encourage more trading.

"I am confident that the easy-to-use interface enables customers to understand, control, and direct their finances in a responsible way," he said.
Newsletter

Related Articles

Bermuda Post
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
'I just lost it' Lowe’s worker fired after 13 years of employment for confronting thieves trying to steal $2K of merchandise
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
×