The crypto exchange Robinhood is under investigation in Florida over the company’s claims about offering the lowest prices for buying digital currencies.
The state’s Attorney General, James Uthmeier, stated in a July 9 press release, “Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive”.
Robinhood has built its crypto business around a model where it earns money by routing trades to outside firms. Those firms pay Robinhood for the trades, a system called payment for order flow.
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While this allows the platform to advertise no direct commission, state officials noted that it may lead to customers paying more through trade prices that are worse than on other platforms.
Florida officials said Robinhood’s promises to deliver “the most crypto for your money” and “lowest cost on average” may not reflect what users actually experience.
The Attorney General’s office issued a subpoena demanding that Robinhood turn over various records by July 31. That includes internal charts, advertisements, employee training materials, details of all crypto trades made by Florida customers in 2024, and documents explaining how rebates and costs are calculated.
Officials also asked for information on how employees explain costs to users and whether any outside parties had access to customer trading data.
On July 7, European regulators launched an investigation into Robinhood’s stock token products after OpenAI stated that the tokens do not provide real ownership in the company. What did they say? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
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