The UK stock trading application website Freetrade.
Free trade
LONDON – British stock trading app Freetrade told customers on Friday it had disabled US stock buying.
Freetrade blamed the stop on US stock purchases in a move by its foreign exchange provider and its bank to limit the trading volume of the platform. Freetrade uses the British fintech firm Currencycloud for foreign exchange transactions.
Barclays made an unexpected decision to significantly limit the volume of foreign exchange transactions it could process for Freetrade, a person familiar with the matter told CNBC. The person preferred to remain anonymous as she was not allowed to speak publicly.
Barclays was not immediately available for comment when contacted by CNBC.
The move affects buy orders that were placed before the open market in the United States, Freetrade said, while sell orders will also be restricted for a short time in the open market.
“We received no warning of what we consider an extremely poor decision,” Freetrade co-founder and CEO Adam Dodds said on Friday. “We are deeply unhappy with this decision and are doing everything we can to correct the situation.”
“Due to the high volumes, we will not be able to respond to individual inquiries about this at this time.”
Freetrade, which has more than 300,000 users, says it has seen an increase in activity this week as a result of wild volatility in equity markets.
A number of very short stocks, including GameStop and AMC, have skyrocketed this week as a large number of Reddit-inspired amateur investors WallStreetBets have piled on these stocks, resulting in massive losses for to some hedge funds.
Users on Thursday criticized U.S. investment app Robinhood after restricting trading on thirteen shares, including GameStop and AMC. Subsequently, the firm said it would resume operations on these securities.
Robinhood said its decision to restrict trading was necessary in order to meet the capital requirements required by the U.S. Securities and Exchange Commission for broker-dealers.
“These requirements exist to protect investors and markets and we take our responsibilities to take them seriously, including the steps we have taken today,” the firm said.
Robinhood also restricted cryptocurrency trading on Friday, stopping instant deposits for cryptocurrency purchases “due to extraordinary market conditions.” The move came as symbolic dogecoin inspired by memories and bitcoins saw large concentrations.
On Friday, the SEC said it was reviewing the “extreme volatility of certain stock prices” and “would act to protect retail investors” from possible abuses or market manipulations.