What Happens if Robinhood Shuts Down?

what happens if Robinhood shut down

With the growth of the platform, thousands of account holders began to trust this platform for investing. This became a major reason for the concern amongst the investors about what happens if Robinhood shuts down.

The answer to which is quite satisfying for the whole investor community. Although there are no such expectations of the platform to collapse or close suddenly, the concern of safety for investors is resolved by the platform itself. Even if Robinhood shuts off, the shares and trades of the account holder remain safe with them.

Even if this affirmation doesn’t satisfy the investor in you, the Robinhood app gives you a surety that your investments will be covered to the highest possible extent if everything goes Shut at the platform.

However, there is a difference between losses due to investment and losses that happen when the platform shuts down. There is no insurance policy on the losses and capital you invest using Robinhood. Only the assets owned by a particular account holder can be recovered. 

If Robinhood shuts off, the shares and trades of the account holder remain safe with them. Since Robinhood is a reputed member of SIPC, the Robinhood app is safest from all sides for investors. However, in case Robinhood is not able to cover expenses, SIPC will provide insurance up to 500,000 dollars for all the account holders. 

Will Robinhood Go Bankrupt?

The chances of Robinhood Bankrupt are not likely to happen anytime soon.  Robinhood is not only the leading investment app for different investments but also it is the safest app for all investments.
Since Robinhood is a reputed member of SIPC, the Robinhood app is safest from all sides for investors.

Bankruptcy is only possible when the Robinhood app will not be able to cover the expenses of all the account holders connected.

However, in case Robinhood is not able to cover expenses, SIPC will provide insurance up to 500,000 dollars for all the account holders. 

Also Read: Is Robinhood FDIC & SIPC Insured?

Will Robinhood Go Out of Business? 

Robinhood is counted amongst the leading commission-free platforms for investing. Also, it is not only preferred by experienced investors but also very famous amongst the new investors in the market.

The platform has experienced a positive graph since 2013. Since the platform is free and easy to use, the chances of going out of business are low.

With over 22 million happy account holders, Robinhood has proved itself to be worthy on the top of the investing app list. However, the rumours of Robinhood going out of business have been up in the market due to certain news stories.

Also, some recent events have made a big impact on the reputation of the Robinhood app amongst the investors.

Even after all the consequences and rumours about the app, the Robinhood application lies in the most trusted and loved platform for investing for different categories of investors.

So, if you are a new investor and looking for a free platform for your investors, you must take a look at the Robinhood app. To ensure that you are investing through the right app, you must check various features and history beforehand.

However, I need not worry about Robinhood going out of business. Because even if it does, SIPC is there to ensure that you and your investments are safe. 

Also Read: Robinhood Unsettled Funds

What Happens if Robinhood Goes Bankrupt?

The chances of Robinhood shutting down or going bankrupt are hanging by a thread. Based on the reviews and opinions of thousands of Robinhood account holders it’s a safe platform. 

However, it’s a major matter of concern for the investors who initiated all kinds of investments through this platform that what happens if Robinhood shuts down or goes bankrupt.

If you’re using the Robinhood app Or willing to use it for investing your money, you must have performed a background check on it.

The major feature of the Robinhood app is that it is a member of a fully functioning corporation for investors securities abbreviated as SIPC. In case Robinhood goes bankrupt, SIPC saves the day by covering the investors.

SIPC offers around 25,000 dollars of investments made by the account holders before such platforms shut down. It is a quickly moving corporation with an efficient and effective working system.

This gives an assurance to the investors that if the app shuts down, their investments and money will not be engaged for a greater period and the issue will be resolved at the earliest.

Although, SIPC  may not be very efficient indirectly returning the assets to the account holder they can do a good job at diverging them.

As soon as the investor app goes down, the SIPC offers a safer platform to its users and reduces any chances of losses. 

What Happens if Robinhood Goes Negative?

In the scenario in which you are not able to keep even the minimums stated by the Robinhood platform, Robinhood goes negative for that account holder.

Also, in case you are not able to pay your marginal debt, you can pay the Robinhood app via cash or any other valuable collateral of the same value.

In extreme cases when you are unable to pay the Robinhood app by cash or collateral, the marginal debt is accumulated against you as negatives.

Then the actual question of What happens when Robinhood goes negative arises. In such a case, the Robinhood app is bound to sell some of your securities which are valued for the equivalent amount you owe to the platform. 

However, there are no fixed marginal rates set by the platform prior and will change from time to time. The securities will be sold as per the current marginal rate of the platform. 

The platform has the authority to sell your securities in case Robinhood goes negative with or without any kind of notice or prior information about it to the account holder.

So, it is safer to ensure that your total matches the current requirements of the Robinhood app and your investments. 

Also Read: Robinhood Social Security Number

Can I Leave Robinhood and Keep My Stocks?

Based on current news stories and rumours about Robinhood shutting down, many questions such as what will happen if Robinhood shuts down or can I leave Robinhood and keep my stocks, etc are budding in the minds of investors. To put your mind at ease from this stress, yes you can keep your stocks and leave Robinhood. 

It is possible by a simple account transfer or transfer of stocks into cash using Robinhood. Also, you can transfer your particular stocks to other brokerage platforms using the features of automated account transfer services for customers known as the ACATS.

This allows you to change Or transfer your account from Robinhood to other brokerage platforms safely and without even bearing any form of losses. 

In case you want to keep operating your Robinhood account as well, you can choose the option of partial transfer that allows you to operate other accounts simultaneously on the same assets.

Otherwise, the option of full transfer is always open for the Robinhood account holders. The platform ensures that you will not have to face any losses while account transfer. 

Once the process of transfer is completed your current account is closed for any further operations on it.

However, the account holders must understand that at the time of initial request for account transfer either full or partial, a minimal fee of 75 dollars is applied by the app. It is non-refundable. 

What Happens to my Crypto if Robinhood Shuts Down?

Being an investor in crypto via the Robinhood app, you must wonder what happens to my crypto if Robinhood shuts down. Probably nothing major. Cryptocurrency is a hugely different world with many platforms for online dealing. 

Even if Robinhood shuts down and closes crypto dealing, you can easily transfer your account to any other platform and trade from there.

Amongst thousands of crypto dealing platforms, you are highly unlikely to bear any expenses or losses due to Robinhood shutting down.

There are chances for you to have a better shot at selling or buying crypto from other platforms as well after Robinhood shuts. 

Although now you are secure about your crypto not going anywhere, you must know a few things about how well Robinhood manages your crypto.

A large share of your cryptocurrency is stored separately in cold storage by the app. This protects your valuable cryptocurrency away from all kinds of threats due to the internet and web. 

This proved to be an additional lock for your safely kept crypto in the Robinhood storage.

However, you can check the amount and percentage of your total crypto segregated under hot and cold i.e. online and offline storage by Robinhood app. 

Also Read: Fix: Robinhood Not Enough Buying Power


Robinhood is probably the safest and most efficient platform for investing your money and time in different forms of investments.

Even with minimal chances of shutting down or failure, Robinhood provides maximum security of assets to its users and does not leave them hanging wondering what will happen if Robinhood shuts down.

This allows you to invest with a better level of trust in the Robinhood platform.