In another big impact of ‘Demat Daka’, a special investigative show aired by Zee Business to make investors informed about hacking incidents in demat accounts, Zerodha has decided to launch a tool that will bar trading in illiquid options far away from theoretical price. Besides, the online trading platform also plans to launch a ‘Kill Switch’ to block orders in all penny stocks, similar to Future and Options (F&O).
Zerodha response comes close on the heels of the awareness programme launched by Zee Business after many investors raised the matter of demat account hacking with the channel.
“We are soon launching a tool that disallows trades in illiquid options far away from theoretical price + a Kill Switch option to block orders in all penny stocks similar to F&O. Address the root cause of most hacking attempts,” tweeted Nithin Kamath, Founder and CEO of Zerodha online.
We are soon launching a tool that disallows trades in illiquid options far away from theoretical price + a Kill Switch option to block orders in all penny stocks similar to F&O. Address the root cause of most hacking attempts. 4/4
— Nithin Kamath (@Nithin0dha) August 2, 2022
Reacting to Zerodha’s action, Zee Business Managing Editor Anil Singhvi lauded the trading platform and its CEO Nithin Kamath.
“Zerodha needs to be congratulated for taking cognizance of the matter raised by us. We are not against any exchange or stock broker, but with the investors,” said Zee Business Managing Editor.
Meanwhile, in a series of tweets, Kamath also spoke about complaints received by them and subsequent action taken by Zerodha.
He said of approximately 65 lakh customers who trade with the platform, around 100 investors reported fraud in their accounts. However, of these frauds, in 80 cases customers (traders/investors) shared details willingly with the hackers, said Zerodha CEO. He said in some 20 cases emails, all Rediffmail IDs, of investors were hacked.
” Since all email hacking cases happen to use Rediffmail, it must have some vulnerability being exploited. We blocked Rediff IDs on trading accounts a while ago & have constantly been notifying users. We also now don’t send password resets to Rediff email IDs,” Kamath said in another tweet.
Earlier, the Securities and Exchanges Board of India (SEBI) also directed exchanges to keep a track of the IP addresses of all the trades in view of rising incidents of frauds involving demat accounts. The directive by the market regulator came in the backdrop of Zee Business’ operation ‘Demat Daka’, which highlighted the loopholes in the system being used by fraudsters to rob the investors.
Besides, the cyber wing of Mumbai Police had also busted a gang of fraudsters involved in using data of customers of a stockbroker company. The action came soon after Zee Business aired the first episode of the investigative show.