Robinhood, the stock-trading tech company, has found itself in an embarrassing situation as some users claim to leverage a glitch to trade with unlimited funds.
The bug has been shared on social media platform Reddit where one trader claimed he had taken a $1m position in stock using only a $4,000 deposit. Other users had reportedly shared videos about how they had used the backdoor to gain infinite investment capital.
The so-called “infinite money cheat code” enabled traders to borrow unlimited funds from Robinhood to trade.
Essentially, the users could borrow money through the Robinhood Gold service, which was then added to their capital. That meant that they could borrow money to be able to borrow more money.
Leveraging the bug is not risk-free as the people using it to tap into more money could be held liable for the money and guilty of securities fraud.
Robinhood has stated that it is aware of the problem and that it is communicating with customers, according to Bloomberg that first reported on the story.
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