Florida’s attorney general has launched a formal investigation into Robinhood, questioning whether the trading platform misled customers about being the lowest-cost option for crypto trading in the U.S.
⚖️ Allegations of Deceptive Practices
Florida Attorney General James Uthmeier accused Robinhood of violating the Deceptive and Unfair Practices Act, citing its marketing claims as potentially misleading.
“Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive,” Uthmeier said in a public statement.
The investigation includes a subpoena for internal documents, with Robinhood given until the end of July to respond.
💬 Robinhood Responds: “Our Disclosures Are Best-in-Class”
Robinhood’s General Counsel Lucas Moskowitz pushed back, stating the platform provides:
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Transparent pricing details
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Real-time disclosures during each trade
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Clear information on fees and revenue sources
“We are proud to be a place where customers can trade crypto at the lowest cost on average,” Moskowitz told Cointelegraph.
💰 What’s the Real Issue? Payment for Order Flow (PFOF)
At the center of the probe is Robinhood’s use of Payment for Order Flow (PFOF) — a controversial revenue model where market makers pay brokers for routing trades through them.
Critics, including Uthmeier, argue this may compromise price execution, potentially costing users more in the long run.
Robinhood previously paid $65 million in 2020 to settle SEC charges tied to similar concerns, though it admitted no wrongdoing.
📈 Market Reaction: Investors Shrug It Off
Despite the investigation, Robinhood’s stock rose 4.4% on Thursday to $98.70, nearing its all-time high of $100.88.
After-hours trading saw a slight dip to $97.23 (-1.49%), but overall investor sentiment remains strong — likely buoyed by Robinhood’s deeper push into blockchain and tokenized assets.
🧠 Takeaway
While Robinhood maintains it offers the lowest average crypto trading costs, regulatory scrutiny is intensifying around marketing practices in the digital asset space.
This case could set a precedent for how trading platforms promote their crypto services in the U.S.
📌 For more updates on crypto regulation and trading platforms, visit: https://cryptodicenews.blog
