Reddit CEO: 'WallStreetBets would not exist if users had to reveal their full identity'
During congressional hearings on GameStop (GME) this Thursday, Reddit CEO Steven Huffman defended the social platform's practice which allows members to use aliases without disclosing their identities.
"Reddit...doesn't require people to reveal their full identity for the platform," said Huffman in response to a question about authentication from Representative Josh Gottheimer (D) of New Jersey.
"Something like WallStreetBets would not exist if users had to reveal their full identity because ... people are revealing gains and losses. They're effectively revealing their financial position in life and we would not put that burden on anybody to force them to do so."
He also highlighted the platform's voting system where comments receive votes in order to rank in visibility and be accepted by the community. Reddit's user base is "exceptionally good at sniffing out untruths, misinformation, and hate stories," added Huffman.
He defended stock positions and mentions put forth by Reddit users which helped fuel GameStop's massive short squeeze in January.
[Read more: GameStop fizzles as stock falls below $50 a share]
"People in the United States ... in fact they do on television all the time, encourage people to make what I would call bad investment decisions. On Reddit I think the investment advice is actually probably among the best because it has to be accepted by many thousands of people before getting that visibility."
During the hearing Huffman emphasized why it's "important to protect online communities like WallStreetBets" and defended the subreddit's role in the recent GameStop saga.
"WallStreetBets is first and foremost a real community. The self-deprecating jokes, the memes, the crass-at-times language, all reflect this," said Huffman during his opening statement in front of lawmakers.
"WallStreetBets may look sophomoric or chaotic from the outside, but the fact that we are here today means they’ve managed to raise important issues about fairness and opportunity in our financial system," he added. "I’m proud they used Reddit to do so."
At the height of the massive short squeeze of the video retailer's stock price, the narrative focused on retail investors' pent up aggravation at the financial industry establishment. The phenomena became a battle between WallStreetbets and hedge funds, or 'suits.'
"A few weeks ago, we saw the power of community in general and of this community in particular when the traders of WallStreetBets banded together at first to seize an investment opportunity not usually accessible to retail investors, but later more broadly to defend all retail investors against the criticism of the financial establishment," said Huffman.
[Read more: Robinhood CEO denies hedge fund collusion in testimony to Congress]
Apart from Huffman, lawmakers on Thursday heard from Reddit user Keith Gill, Robinhood's CEO Vlad Tenev, Citadel CEO Kenneth C. Griffin, and Melvin Capital founder Gabriel Plotki.
Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre
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