Florida AG Investigates Robinhood Over Crypto Pricing Claims

Florida Legal professional Normal James Uthmeier has launched an investigation into Robinhood Crypto, alleging the favored buying and selling platform has misled prospects by falsely selling itself because the least costly option to buy digital property.

“Robinhood has lengthy claimed to be one of the best discount, however we consider these representations had been misleading,” Legal professional Normal James Uthmeier mentioned in a assertion Wednesday. 

The workplace has issued a subpoena for inside paperwork, alleging that Robinhood Crypto is violating Florida’s Misleading and Unfair Commerce Practices Act by making probably false price representations to shoppers.

“Crypto is an important element of Florida’s monetary future, and President Trump’s efforts to advance the crypto market will make America stronger and wealthier,” Uthmeier mentioned.

The probe comes at a time when crypto regulation is present process a big shift underneath the Trump administration, with the SEC not too long ago ending investigations into quite a few crypto corporations, together with Robinhood itself, simply months in the past. 

Nevertheless, the state-level investigation focuses particularly on shopper safety reasonably than federal securities violations.

The investigation targets Robinhood’s enterprise mannequin, which generates income by means of fee for order stream reasonably than charging direct commissions. 

Underneath this construction, Robinhood routes buyer trades to third-party corporations that pay the platform for the chance to take the alternative aspect of buyer trades.

The Florida probe marks a renewed deal with Robinhood’s controversial fee for order stream mannequin, the identical observe that drew a $65 million SEC high quality in 2020 for failing to reveal the way it might result in inferior commerce execution for purchasers.



The AG’s workplace mentioned that whereas Robinhood markets itself as providing the “lowest price on common” for crypto buying and selling and guarantees to ship prospects “essentially the most crypto in your cash,” proof allegedly suggests buying and selling on the platform may very well be dearer than opponents as a result of its order stream construction.

The subpoena, which requires a response by July 31, seeks intensive documentation, together with organizational charts, advertising and marketing supplies, worker coaching paperwork, and detailed data of all Florida consumer trades in 2024. 

The request additionally seeks paperwork displaying how the platform determines pricing for transaction rebates, coaching supplies for personnel discussing crypto buying and selling prices with customers, and data associated to the sale or entry of customers’ cryptocurrency buying and selling information.

“Ideally, any illustration made publicly by a enterprise have to be substantiated with credible proof,” Hargun Singh, Web3 lawyer and affiliate at Luthra and Luthra Legislation Places of work India, instructed Decrypt.

“On this context, the subpoena issued to Robinhood Crypto seems to stem from a prima facie view that buying and selling on its platform could, in truth, be dearer than on competing platforms, instantly contradicting its advertising and marketing claims of being the ‘lowest price’ choice.”

To defend towards the allegations, Singh mentioned Robinhood would wish to “produce substantive proof supporting its claims relating to decrease pricing” and present transparency by disclosing particulars about its “pricing methodology” and the “influence of fee for order stream preparations on crypto commerce execution and pricing for customers.”

Robinhood is “unlikely to reach difficult the subpoena on jurisdictional grounds” since shopper safety legal guidelines typically have “extraterritorial applicability” when misleading promoting impacts residents inside a particular jurisdiction,” he mentioned.

Robinhood has been approached for remark.