Robinhood probed of the Florida AG office for alleged ‘deceptive’ crypto pricing claims
The Robinhood Crypto is under the investigation of Florida due to the alleged misconception of its platform as the least expensive way to buy crypto.
In a Thursday statementFlorida’s attorney James Uthmeier said his office has evidence to suggest that crypto entrepreneurs really pay more, on average, when using Robinhood than using competing platforms.
“Crypto is an essential element of Florida financial future, and President (Donald )’s efforts to advance the crypto market will make America stronger and rich. When consumers buy and sell crypto assets, they deserve transparency in their transactions,” Uthmeier said. “Robinhood has long claimed to be the best bargain, but we believe those representations are deceptive.”
In the midst of Uthmeier’s allegation is Robinhood’s payment for order flow (Pfof) business model. PFOF allows Robinhood to offer trading without commissions by instead of generating revenue from route customer trade through market makers in exchange for a cut of income. Skills critics -also used by Robinhood for stock trading -complained that PFOF presents a natural conflict of interest, which potentially insults the company to route customers’ trade by the market manufacturer who offers the most commission, not one with the best price for customers.
In 2020, Robinhood pays $ 65 million to resolve a US Securities and Exchange Commission (Sec) The action of implementation stating that the company has mistaken the quality of customer trade implementations. Robinhood did not admit or deny the findings of Sec. Under former chairman Gary Gensler, the SEC considers the ban on PFOF but ultimately not. The PFOF is prohibited in the United Kingdom and is prohibited in the European Union starting next year.
Robinhood CEO Vlad Tenev has long defended the practice, which tells CNBC in 2023 that PFOF is “naturally staying.”
“Our disclosures are best-to-class-we disclose pricing information to customers during the lifecycle of a trade that clearly outlines the spread or the fees associated with the transaction and the income Robinhood receives.
Uthmeier’s subpoena is looking for a murder of information from Robinhood, including documentation of how the platform determines pricing for transaction rebates or PFOF skills with market manufacturers, documents containing comparison price reviews of other crypto exchanges, and documents related to selling or accessing users’ data sales or accessing data -accessing data.
Robinhood is up to the end of the month to respond to the Uthmeier subpoena.
