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Comment by cwperkins | Hacker News Reader

Does anyone know what happens in the event that a brokerage like robinhood fails? Are the assets insured by a federal agency or is it wiser to switch my portfolio to another broker?

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Read the small print at the bottom of the page?

> Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC) ...

> Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Thank you

All of the assets you have in Robinhood aren't actually held by Robinhood; they're held by Apex, which is a huge firm that many companies use. If Robinhood goes down, your assets are still with them and there'd be some reasonable way to transfer them to another brokerage.

If Apex goes down, which is vastly more unlikely, Federal SIPC insurance kicks in up to $500,000.

Thanks, that's useful information

Exactly true for stocks, but I don't think Apex or any equities clearinghouse is clearing cryptocurrencies (exception: clearport for CME futures). So we're left guessing as to whose balance sheet holds the crypto assets.

According to all that light print at the bottom of the website, up to $500K in securities are protected... and all your crypto belongs to whoever manages to grab it, sue all you like afterwards.

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