Massachusetts’s leading securities regulator has reportedly launched a Robinhood investigation into the recent decision of the popular trading platform to launch an in-app prophecy of markets that allow customers to bet on the outcome of events, including the March Madness Match-up.
According to a report on Monday From Reuters, the Massachusetts Secretary of State Bill Galvin – a well -known aggressive regulator – sent Robinhood a subpoena last week looking for information about the number of Robinhood users in Massachusetts who were asked to trade in contracts with college sports events, and looking for copies of Robinhood -related materials.
“This is another gimmick from a company that is so good at gimmicks to attract investors away from sound investment,” Galvin told Reuters. Galvin’s office confirmed the investigation of CoinDesk, adding that Robinhood’s response to the subpoena was due on April 3.
The Robinhood’s Prediction Market, activated by the Commodity Futures Trading Commission (CFTC) -regulated Malashi, Launched on March 17 with contracts related to madness contracts, as well as another linked to the upper bond of Target Fed fund rate in May. At the time of the launch, Robinhood told CoinDesk that it was talking to the CFTC “in recent weeks” leading to the launch.
A spokesman for Robinhood has once again said that the event contracts offered through the prophecy of predicting markets are “controlled by the CFTC and offered by entities registered by the CFTC.”
“Prophecy markets have become more relevant for investors and institutional investors, and we are proud to be one of the first platforms to offer these products to retail customers in a safe and regulated way,” the spokesman added.
The trading platform had previously attempted to launch the hub market prediction in February, leading the Super Bowl, but the launch was delayed at the request of the CFTC.
