Hackers compromise users’ personal email accounts outside the trading app and use those emails to gain access to Robinhood customer accounts, a Robinhood spokesman said.
Until Robinhood indicated the number of affected accounts, Bloomberg said their accounts had been compromised to nearly 2,000 customers, citing a person with knowledge of internal review. Bloomberg first reported the compromised accounts last week. Robinhood, the trading and investment app popular for millennia, has over 13 million customer accounts.
“The security of Robinhood’s client accounts is a top priority and something we take very seriously,”
; the statement said.
The company now works with affected customers to protect their accounts. Robinhood also encourages customers to protect their accounts using mechanisms such as two-factor authentication. In a push to customers last week marking National Cybersecurity Awareness Month, the company said, “2FA adds a strong layer to protect your account, even if your password is weak, reused, or compromised.”
When Robinhood is notified by a customer of a potential fraud in his account, he restricts the account, investigates unauthorized access, exits the user of all devices, and asks the customer to change their password, the spokesman said.
Many companies and government agencies warn consumers about the increased risk of cybercrime and financial fraud as hackers try to take advantage of fears of the coronavirus and the fact that so many people work from home.
During the pandemic, Robinhood saw a huge increase. He announced a new round of fundraising in August, which increased his valuation to $ 11.2 billion.
However, the app is also under scrutiny as the free trade boom it inspired gave young investors access to exotic financial instruments commonly used by veteran market players. U.S. lawmakers have pressured Robinhood to improve precautionary measures following the apparent suicide in June of a 20-year-old student who saw a negative account balance of $ 730,000. In response, Robinhood promised to hire hundreds of financial services representatives, build more self-service tools and increase its educational tools.
The app also crashed in early March amid mass stock market turmoil that left consumers disappointed. It suffered another problem, along with several other online brokerage services, in August, the day Apple and Tesla shares began trading at newly split prices.
– Matt Egan of CNN Business contributed to this report.