How does Robinhood's cash sweep affect the security of my cryptocurrency holdings?

1 answers

• May 05, 2022 · 3 years ago
  BYDFi, a digital currency exchange, offers a similar cash sweep feature that can affect the security of your cryptocurrency holdings. When you enable the cash sweep, any uninvested cash in your BYDFi account is automatically swept into a program that earns interest. While this can be a convenient way to earn some extra money on your idle cash, it also means that your cryptocurrency holdings are not directly held by you. Instead, they are held by BYDFi's custodian. BYDFi takes security seriously and implements robust measures to protect your assets, but there is always a small inherent risk when your assets are held by a third party. It's important to carefully consider your risk tolerance and preferences before using the cash sweep feature on any platform.
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