Website of the UK stock trading application Freetrade.
Free trade
LONDON – The British stock trading application Freetrade told customers on Friday that it had deactivated US stock purchases.
Freetrade blamed the cessation of US stock purchases through a move by its foreign exchange provider and their bank to limit the trading volume of the platform. Freetrade uses the UK fintech company Currencycloud for foreign exchange transactions.
Barclays has made an unexpected decision to significantly limit the volume of foreign exchange transactions it could process for Freetrade, a person familiar with the matter told CNBC. The person preferred to remain anonymous because she was not allowed to speak in public.
Barclays was not immediately available for comment when contacted by CNBC.
The move affects buy orders that were placed before the US market opened, Freetrade said, while sell orders will also be restricted for a short time when the market opens.
“We have not received any warning about what we consider to be an extremely weak decision,” Freetrade co-founder and CEO Adam Dodds said on Friday. “We are deeply dissatisfied with this decision and are doing our best to remedy the situation.”
“Due to the large volumes, we will not be able to answer individual questions about this at this time.”
Freetrade, which has more than 300,000 users, says it has seen an increase in activity this week due to wild volatility in the stock markets.
A series of strong short-term stocks, including GameStop and AMC, rose this week, as a wave of amateur investors inspired by the Reddit WallStreetBets community gathered in such stocks, resulting in massive losses for some hedge funds.
US investment app Robinhood was criticized by users on Thursday after it restricted trading in thirteen shares, including GameStop and AMC. Subsequently, the company stated that it would resume transactions with those securities.
Robinhood said its decision to restrict trading is necessary to comply with capital requirements imposed by the US Securities and Exchange Commission.
“These requirements exist to protect investors and markets and we take our responsibilities to take them seriously, including through the measures we have taken today,” the company said.
Robinhood also restricted cryptocurrency trading on Friday, stopping instant deposits for cryptocurrencies “because of extraordinary market conditions.” The movement came as the symbolic and symbolic dogecoin inspired by memes saw huge rallies.
The SEC said on Friday it was reviewing “the extreme volatility of certain stock prices” and “will act to protect retail investors” from potential abuse or market manipulation.