The website of the British app app Freetrade.
Free trade
LONDON – British app stock trader Freetrade told clients on Friday that purchases of US shares had been eliminated.
Freetrade blames the cessation of US stock purchases in motion by its currency provider and their bank to limit the trading volume of the platform. Freetrade uses the British fintech firm Currencycloud for currency transactions.
Barclays has taken an unexpected decision to significantly limit the amount of currency transactions it can process for Freetrade, a person familiar with the matter told CNBC. The person prefers to remain anonymous as they are not authorized to speak in public.
Barclays was not immediately available for comment when CNBC contacted him.
The move will affect buy orders placed ahead of the U.S. market, Freetrade said, while sell orders will also be restricted on the open market for a short period of time.
“We have not received any warning about what we consider to be an extremely poor decision,” Freetrade co-founder and CEO Adam Dodds said in a statement on Friday. “We are deeply dissatisfied with this decision and we are doing everything possible to rectify the situation.”
“Due to high volumes, we are currently unable to respond to individual inquiries regarding this.”
Freetrade, which has more than 300,000 users, says it has seen an increase in activity this week due to wild volatility in the stock markets.
A number of heavily shorted stocks, including GameStop and AMC, soared this week as a flurry of amateur investors inspired by the Reddit community, WallStreetBets, stacked in such stocks, resulting in huge losses for some hedge funds has.
US investment app Robinhood was criticized by users on Thursday after trading in thirteen shares, including GameStop and AMC, was restricted. The firm then said it would continue with those securities.
Robinhood said its decision to restrict trading was necessary to meet the capital requirements set by the U.S. Securities and Exchange Commission for brokers.
“These requirements exist to protect investors and the markets, and we take our responsibilities to meet them seriously, including through the measures we have taken today,” the firm said.
Robinhood on Friday also restricted trading in cryptocurrencies and stopped immediate deposits for cryptocurrencies “due to extraordinary market conditions.” The move came when bitcoin and meme-inspired token dogecoin saw big gatherings.
The SEC said on Friday that it was reviewing “extreme price volatility of certain stocks” and would act to protect retail investors from potential market abuse or manipulation.