Florida Legal professional Basic James Uthmeier has launched an investigation into Robinhood over allegations that the retail buying and selling big falsely promotes its crypto platform because the least costly option to buy digital property.
Uthmeier notes that Robinhood earns income by routing prospects’ trades to third-party market makers in a payment-for-order-flow (PFOF) system.
The state lawyer normal says Robinhood attracts prospects by claiming to supply the “lowest value on common” to commerce crypto. Uthmeier argues, nonetheless, that Robinhood’s PFOF construction truly makes it dearer than competing platforms that provide all-in buying and selling prices.
“When shoppers purchase and promote crypto property, they deserve transparency of their transactions. Robinhood has lengthy claimed to be the very best discount, however we consider these representations had been misleading.”
The lawyer normal says third-party market makers that pay Robinhood for order move typically should cost worse costs to be worthwhile.
Uthmeier issued a subpoena, asking Robinhood for organizational paperwork, worker info, promoting historical past, disclosures made to customers associated to charges, pricing paperwork, PFOF info, paperwork associated to the sale of buyer knowledge, and knowledge relating to Florida customers particularly.
Robinhood’s crypto division is required to answer the subpoena by the tip of the month, in keeping with the lawyer normal.
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