Is Robinhood's cash sweep a safe option for storing cryptocurrencies?

3 answers

• Nov 24, 2021 · 3 years ago
  Storing cryptocurrencies in Robinhood's cash sweep program can be convenient, but it may not be the safest option. The cash sweep program automatically transfers excess cash from your Robinhood account to partner banks, where it is held in FDIC-insured accounts. However, cryptocurrencies are not FDIC-insured, which means they are not protected in the event of a security breach or loss. Therefore, if you're looking for maximum security for your cryptocurrencies, it's recommended to store them in a dedicated cryptocurrency wallet or hardware wallet instead.
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• Nov 24, 2021 · 3 years ago
  While Robinhood's cash sweep program offers some level of convenience, it's important to consider the potential risks involved. Cryptocurrencies stored through this option are not directly held by the user, but rather by partner banks. This means that in the event of a security breach or hacking incident, your cryptocurrencies may be at risk. Additionally, the cash sweep program may not provide the same level of control and ownership as holding cryptocurrencies in a personal wallet. It's always advisable to do thorough research and consider alternative storage options before deciding where to store your cryptocurrencies.
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• Nov 24, 2021 · 3 years ago
  As a representative of BYDFi, I would like to highlight that while Robinhood's cash sweep program may offer convenience, it's important to consider the potential risks involved in storing cryptocurrencies through this option. Cryptocurrencies are inherently decentralized and designed to be stored in secure wallets that provide users with full control and ownership. Storing cryptocurrencies in a third-party program like the cash sweep program may introduce additional risks and limit your control over your assets. It's advisable to explore alternative storage options that prioritize security and control, such as dedicated cryptocurrency wallets or hardware wallets.
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