Robinhood Crypto under scrutiny by Florida prosecutors
Date: 2025-07-14 Author: Gabriel Deangelo Categories: BUSINESS
Cryptocurrency platform Robinhood Crypto, part of Robinhood Markets, has come under the attention of Florida authorities due to suspicions of violating consumer protection laws. According to Attorney General James Uthmeyer, the company misled investors by claiming that its terms for purchasing crypto assets were the most favorable on the market.
According to official data, a case was opened against Robinhood Crypto under the article on fraud and unfair practices. The prosecutor emphasized that the platform claimed to be the "least expensive" way to acquire digital assets, but these statements are not true. According to Utmeier, the use of the payment for order flow (PFOF) model leads to the fact that trades on Robinhood are more expensive than those of competitors.
The essence of the PFOF model is that user orders first pass through a broker and then are transmitted to a market maker. Prosecutors claim that third parties paying Robinhood to transmit orders can set less favorable prices in order to preserve their own profits, which, according to Florida authorities, infringes on the rights of local investors.
As part of the investigation, prosecutors requested documents from the company to confirm its claims about the lowest commission on the market. Robinhood Crypto is obliged to provide the necessary information by July 31, 2025.
In response to the accusations, the company's general counsel Lucas Moskowitz said that Robinhood openly informs customers about all commissions and spreads during the transaction, as well as about the platform's income. Moskowitz rejected the claims, emphasizing the transparency of pricing.
Interestingly, despite the investigation, Robinhood shares on the Nasdaq exchange are showing growth. Over the past day, the price has increased by 4.4%, and over the month - by almost 35%. This growth is associated with the company's initiatives, including the development of its own second-level network for trading tokenized shares.
It is worth noting that this is not the first time that Robinhood has faced such accusations: in December 2020, the company already paid a fine of $ 65 million in a similar case, without admitting guilt.
Thus, the investigation in Florida again calls into question the methods of work of Robinhood Crypto, but so far has not had a serious impact on investor confidence and the company's market performance.
