Re:Tell HN: Instagram demands I send a picture of myself to ...
by acaloiar on Monday June 20, 2022 @10:27PM
(#31819090)
I'm not sure if it's possible to make that distinction. Trades are funded by brokerage cash. From the customer perspective, brokerage cash is a pool of cash available for trading or withdrawal. It may have originated from an ACH, wire, trade liquidation, or a combination of any of those things.
However, I am confident that I funded trades from deposits that were made after the withdrawal ban was put in place. I made multiple deposits over ~8 months in which the withdrawal ban was in effect, and those deposits funded multiple trades. Which means Robinhood is happy to deposit and trade funds from an account in an "unverified" state, but not allow withdrawals. If my account was truly compromised, justifying an unverified state, then I wouldn't want them funding trades from an ACH transfer from a bank account that was added when it was in a verified state.
The policy, whatever it may be, clearly serves Robinhood's purposes and not the customer's.
Do they allow all trades, or only trades involving the newly deposited funds and descendants of such trades?
That might be an interesting approach to trying to lessen the harm of a false positive from their fraud detection. Essentially put a complete activity block on everything currently in the account (money and stocks), but only block withdrawals on things added to the account after the fraud detection hit.
If it turn out to be a false positive then it is still pretty annoying, but at least you get to continue with some activity so you account isn't totally useless while you get reverified.
If it turns out that the account has actually fallen into the hands of a scammer, they can't harm what is already in there and if they put some of their own funds in to try to trade for some reason then that ends up as a gift to you when you get the account back.