Has your online ASX trading account been hacked?

The rise and rise of online trading has largely been a blessing.

It has simplified and streamlined the process of buying and selling shares, both on the ASX and international share markets. It’s greatly reduced brokerage fees on every trade you make. And it’s opened the door to new investors who likely would have remained on the sidelines if they had to go through traditional brokers.

One of the biggest disruptors in the online trading space is Robinhood, owned by United States based Robinhood Markets, Inc.

If you’re unfamiliar with Robinhood, it’s a mobile app that allows you to invest in shares and options. (And cryptocurrencies, if you’ve got the cast iron stomach for that.) It’s best known for leading the way in the ‘zero brokerage’ fee space.

Founded 7 years ago by Baiju Bhatt and Vlad Tenev, the app took off in popularity in the US this year as lockdowns on social distancing saw many people stuck at home and hoping to earn some extra money.

Its millions of new users are primarily younger and often new to the world of investing.

But what they, and the users of other online accounts, almost certainly hadn’t counted on was the risk of their trading accounts being hacked.

Hackers selling trading account details on the dark web

According to a Bloomberg review of dark web marketplaces, more than 10,000 email login credentials linked to Robinhood accounts were up for sale on the dark web this week. This could enable would-be buyers to access customer accounts at Robinhood Markets.

Robinhood’s internal investigation revealed almost 2,000 accounts were compromised.

Bloomberg notes that:

The firm said there are no signs its systems were breached and it employs several security measures, while encouraging customers to enable two-factor authentication. Robinhood has also promised to fully compensate customers if the company determines they lost money because of unauthorised activity.

It’s not just Robinhood users being targeted, though Eli Dominitz, chief executive officer of Q6 Cyber, says the number of hacked emails involving Robinhood are 5 times more than those tied to other brokerages.

He explained: “If they feel that Robinhood gives them greater upside than trying to steal money from Bank of America, that’s what they’re going to do.”

There has been no indication yet that accounts of online trading platform Superhero, oft dubbed the ‘Australian Robinhood’ have been hacked.

The brainchild of Afterpay Ltd (ASX: APT) co-founder Nick Molnar and Zip Co Ltd (ASX: Z1P) co-founder Larry Diamond, the new Superhero app provides low cost brokerage options on a mobile platform.

Regardless of which trading platform you use, though, if you’re doing it online, it pays to be diligent. And certainly take the operators’ advice on two-factor authentication.

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Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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