Robinhood is an impeccable platform for traders to trade stocks and cryptos on an easy and safe platform. This is why it is a popular platform and millions of people are using it to invest in cryptos and stocks.
Now seeing the immense efficiency of the platform, having trades or account restricted can put brakes on your investment routines. But due to security and certain other complications, the Robinhood platform puts restrictions on certain accounts.
Robinhood is crystal clear about the reasons for restrictions and also about the instructions that you need to follow to lift those restrictions.
Robinhood Crypto Restricted
Robinhood allows you to trade stocks, Cryptos, ETFs, and other assets. But there are times when you are not able to perform any transaction from your account. One such scenario is when you may not be able to buy any crypto in your account and Robinhood restricts your account.
Robinhood Crypto restrictions may be imposed because of different reasons including if you do not have the required buying power or the account is flagged for day trading pattern.
Check out more causes and fixes of the issue in the next section of the post.
Robinhood Crypto Restricted: Reasons & How To Fix It?
Account restrictions from crypto on your Robinhood account can be due to the reasons listed below along with their fixes:
1. Control Person
Control person refers to the owner or top manager of the company. So, if you trade in stocks too and you declare yourself as the control person of a particular company, then you will be restricted from trading stocks of that particular company.
Robinhood platform restricts a person from trading due to its compliances that prevent manipulation of a stock on its platform.
You cannot lift this restriction. You’ll only have to create a new account in this scenario.
2. Transfer Reversals
You have had any transfer reversals like failed transfers to your Robinhood account from your bank, that can cause the platform to trigger a service warning.
This happens when you try to transfer amounts from your bank or credit card that have restricted crypto and stock operations.
You can resolve the issue and lift the restriction by changing the payment method.
3. Incorrect Or Outdated Information
This common issue may arise in cases like the credit card you use for transactions on the account is past its expiration date and you didn’t update the details or you have changed your bank account and didn’t update your details on the platform.
So, Robinhood puts restrictions on such accounts as a security measure for all its users.
To lift these restrictions, all you’re required to do is update your outdated or incorrect information on the platform.
4. Fraud Inquiries
Security being of utmost importance, Robinhood will restrict an account if it notices any suspicious activity from your account.
This is usually a temporary restriction.
To lift this restriction, you need to contact Robinhood customer services to know what exactly triggered the restriction.
5. Account Levies
If your account has a negative balance, then you will be unable to make payments to the brokers. So, Robinhood restricts your account until this issue is resolved.
To fix the issue, you need to make negative payments.
6. Other Reasons
If none of the above-listed reasons apply to you, then it might be due to some other reason and you should talk to Robinhood customer support to know about the issue and resolve it.
If your Robinhood Financial account is restricted from trading in stocks, then your Robinhood Crypto account will also be restricted from trading in cryptos automatically.
Did Robinhood Restrict Crypto Trading?
As of January 29th, 2021, the joke cryptocurrency Dogecoin went up by 300% in mere 24 hours. Due to these extraordinary market conditions, Robinhood stopped the instant deposits for cryptocurrencies. Instant deposits allowed the users to immediately use the funds transferred from their accounts without waiting for them to get settled.
The users, though, can still use the settled funds to make the payments and buy crypto.
How Long Do I Have To Wait For Robinhood To Lift The Restrictions?
It depends on the reason for which the restrictions were imposed on your account. The restrictions are lifted as soon as the issues are resolved. Usually, it can take anywhere between a week to up to 90 days.
Why Is A Control Person Restricted From Making Transactions?
A control person is blocked from trading in the stocks of the company of which they are established as a control person. This is because the Robinhood platform ensures that there’s no one stock that gets manipulated.
Robinhood platform is an efficient and easy platform to buy, sell and trade cryptos and stocks. That’s why it is a huge inconvenience for the investors to have their brokerage account limited. Robinhood puts restrictions on the account to hold certain security measures for all its users.
The reasons can include you being a control person of a certain company and so, you’ll not be allowed to trade those stocks. Other reasons include a negative balance in your account or making any suspicious transactions.
Moreover, if you have restrictions on your Robinhood Financial account, that also implies that you cannot trade in cryptos too. To resolve the issues, you can look after the core reason for the restriction as listed above or as Robinhood customer support guides you.