Robinhood Investors have become Targets of Hackers

Whether it's a Nigerian (or even not Nigerian) prince promising to send you big bucks for your bank account information, or hackers from different parts of the world stealing your personal information, the pandemic vultures fall victim, and the most recent Victims are the thousands of new retail investors who flock to Robinhood, the hugely popular royalty-free trading application.

An internal review by Robinhood found that nearly 2,000 accounts were compromised in a recent hacker attack that siphoned off customer funds. Bloomberg reported that the hackers compromised users' personal email accounts outside of the trading app and used those emails to gain access to their Robinhood accounts. Earlier this week, Robinhood sent out push notifications to users suggesting they could enable two-factor authentication on their accounts. "We are always responding to customers who report fraudulent or suspicious activity and are working as quickly as possible to complete the investigation," the company said in an email statement.

"The security of Robinhood customer accounts is a top priority and we take it very seriously." However, the victims of the attack complained via social media that they could not reach Robinhood customer service for days. Many Americans opened their first online trading accounts during the pandemic and used part of their stimulus programs to trade stocks.

A dramatic sell-off of stocks in the past four months, combined with more time at home due to the quarantine, has further increased retail investor interest in the stock market - including those who have never dipped their toes in the waters before and know little about it . All of the major online stock trading platforms have seen a surge in demand over the past few months, and new accounts have skyrocketed in the first quarter. Many of the new users are young or even first-time investors. Over half of them are 34 years old or younger.

Online brokers saw new accounts grow up to 170% in the first quarter, while the second quarter was even higher. Despite glitches and crashes on busy days, Robinhood added 3 million accounts this year, with half of them being first-time traders. The start-up grew from one million subscribers in 2016 to six million accounts in 2018 and currently has more than 13 million. In August the company raised $ 200 million from investors and was valued at $ 11.2 billion. Despite the enormous increase in popularity, which is particularly popular with millennials with a mean customer age of 31, there haven't been some reputational problems. In March, when the market was down and volatility was at an all-time high, the Robinhood platform continued to crash.

Robinhood attributed the failures to "instability" in the infrastructure that prevented the systems from communicating with each other. The problem prevented customers from accessing the application, website, and Help Center. In addition, a young options trader committed suicide in June after seeing negative portfolio value that was inconsistent with his actual balance. However, the rise in new entrants and the rise in trade overall has also created an unprecedented opportunity for hackers, say cybersecurity experts. CNBC reported last week that brokers' accounts are targeting the "dark web" with the Robinhood accounts being the most expensive, suggesting they are easier to crack.

The report said that hacked account credentials are available at prices between $ 3 and $ 30. Online brokers aren't the only likely targets of cybercrime, either. Due to increased online shopping, bans and remote work environments, many analysts are warning of the cyber threat on unsafe platforms during the pandemic. Phishing attacks, the most common hacks, have increased more than 600% since the beginning of the COVID pandemic and are targeting businesses, individuals and government agencies. Although many cyber criminals have pledged not to attack health care providers during the coronavirus outbreak, the World Health Organization claims that the number of cyber attacks has increased five-fold since the Covid-19 outbreak.