Cash App launched a declaration earlier today stating that Axos, the app’s cleaning broker, is now subject to a 250% boost in capital requirements, momentarily obstructing the app from satisfying AMC and Nokia (NOK) purchases.
Money App Blames Clearinghouse for Trading Halt
Money App mentioned that Axos, its cleaning broker, now requires to offer 250% more capital than before to continue its services. Neither Axos nor Cash App was able to secure a line of credit to satisfy the new requirement, and Cash App was required to stop its users from purchasing AMC or NOK.
Nevertheless, users can still sell their stocks.
The cleaning broker who processes our trades, Axos, has temporarily stopped buys of $AMC & &$NOK. This was not Cash App’s choice –– we disagree with this move wholeheartedly. We hope to make these stocks offered for purchase once again as quickly as possible.
—– Cash App (@CashApp) February 2, 2021
Clearing brokers require to offer capital deposits for apps like Cash App to support trading. The DTC, a world-leading clearinghouse, recently raised the capital requirement on Axos, and Axos has actually restricted Cash App’s trading appropriately. A
declaration from the app checked out that “& ldquo; We are totally based on our brokers’ ability to support our trades,” & rdquo; including that & ldquo; Axos has not supplied the needed extra capital and has actually limited purchases of AMC and Nokia.”
& rdquo; Cash App posted the email from its broker-dealer, DriveWealth, which signaled them about the change.