Robinhood
Exchange CustodyRobinhood is a publicly traded (NASDAQ: HOOD) fintech platform offering commission-free crypto trading alongside stocks. Acquired Bitstamp in 2024. Crypto wallets now support withdrawals. Over 23 million funded accounts.
Quick Verdict
With a Custody Score of 6.9/10, Robinhood is ranked #5 of 10 among exchange custody providers. Its strongest category is Regulatory and its weakest is Counterparty Diversification.
Analysis
Score Breakdown
The Custody Score is a weighted average across 8 criteria, each rated 1-10.
| Criterion | Score | Weight | Weighted |
|---|---|---|---|
| Security | 7 | 20% | 1.40 |
| Insurance | 6 | 15% | 0.90 |
| Regulatory | 8.5 | 15% | 1.27 |
| Fee Transparency | 6 | 10% | 0.60 |
| Track Record | 7 | 15% | 1.05 |
| Withdrawal Flexibility | 7.5 | 10% | 0.75 |
| Reporting & Audit | 8 | 10% | 0.80 |
| Counterparty Diversification | 2 | 5% | 0.10 |
| Total | 100% | 6.9 |
Key Features
- ✓Commission-free trading
- ✓Crypto alongside stocks
- ✓Crypto wallets with withdrawals
- ✓23M+ funded accounts
- ✓Bitstamp acquisition
- ✓Clean mobile interface
Fee Breakdown
| Setup Fee | Free |
| Annual Custody Fee | None |
| Transaction Fee | 0% commission (spread-based ~0.4%) |
| Withdrawal Fee | Network fees |
| Notes | Commission-free trading. Revenue from spread and payment for order flow. |
Security Details
Key Management
Exchange-managed custody
Cold Storage
Majority cold
SOC Compliance
SOC 2 Type 2
Penetration Testing
Yes
Incident History: 2021 data breach (customer info, not funds). Crypto wallets added later.
Insurance Coverage
Coverage
SIPC for securities (NOT crypto). Crime insurance for crypto.
Carrier
SIPC (securities) + crime insurance
Details
SIPC coverage for stocks. Crypto has separate crime insurance.
Regulatory Status
Licenses
- NASDAQ listed (HOOD)
- SEC/FINRA registered (securities)
- State money transmitter licenses (crypto)
Publicly traded. SEC registered for securities. State-licensed for crypto.
Pros & Cons
Pros
- Commission-free crypto trading
- Crypto alongside stock portfolio
- Publicly traded — transparent
- 23M+ funded accounts
- Crypto wallets now support withdrawals
Cons
- Spread-based pricing can be costly
- 2021 customer data breach
- Limited crypto selection
- Previously no crypto withdrawals
- Crypto is secondary to stock trading