Robinhood has withdrawn plans to launch in the United Kingdom, citing a 'changed world' as the reason for putting the brakes on expansion efforts.
In an email sent to users subscribed to a waiting list for when the firm's app launches in the UK, Robinhood said it has "made the difficult decision to postpone our UK launch indefinitely."
Robinhood uses the slogan, "Investing for everyone," and provides a mobile application for trading in stocks, exchange-traded funds (ETFs), and options, including fractional shares, as well as for cryptocurrencies, no matter a user's level of understanding.
Robinhood obtained authorization from the UK's Financial Conduct Authority (FCA) to operate in August 2019. A waiting list was set up for interested UK participants, of which approximately 250,000 people signed up.
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The trading app now intends to close down the waitlist and pull the UK version of the Robinhood website shortly. Robinhood will also be deleting email addresses submitted by users.
"The world has changed a lot over the past several months and we're adapting with it," Robinhood says. "On a company level, we've come to recognize that our efforts are currently best spent on strengthening our core business in the US and making further investments in our foundational systems."
When it comes to UK staff, the company intends to transfer them to core US team projects wherever possible, and for the time being, a set of UK employees will remain at their posts.
No concrete explanation has been offered for the withdrawal. However, it is possible that Robinhood has chosen to tighten its belt and delay expansion plans due to the novel coronavirus pandemic -- as have many other businesses -- but it could also be due to the need to focus on the current US situation.
The company has been mired in recent controversy following the suicide of Alex Kearns, a 20-year-old who mistakenly thought he had lost $730,000 via the app, when in fact he was in credit.
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In a note, as reported by The Guardian, the Robinhood customer said he had "no clue what he was doing."
Robinhood said that the tragedy was "personally devastating" and has promised to make a $250,000 donation to the American Foundation for Suicide Prevention, as well as overhaul the app's tools and functionality to make it clearer in what is being traded, and how.
US lawmakers have also expressed concern regarding the protection of consumers in the investor market, especially when they may be inexperienced or vulnerable. Rep. Sean Casten, serving Illinois' 6th Congressional District, said in a letter sent to Robinhood executives that the company needs to "prove that it is taking every appropriate step to make sure its customers are not being put in harm's way."
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"Although our global expansion plans are on hold for now, we will continue our work to democratize finance for all and we look forward to the day when we can bring this mission to the UK," the company added.
Update 12.09 pm BST: A Robinhood spokesperson told ZDNet:
"We know many people in the UK were excited to invest through Robinhood, and we regret that we cannot deliver our product to UK customers in 2020. Although our global expansion plans are on hold for now, we're committed to democratizing finance for more people around the world. We look forward to the day when we can bring this mission to the UK."
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