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Florida Attorney General James Uthmeier launched an investigation into Robinhood Crypto, citing that the firm has allegedly misinformed consumers that it provides the “lowest cost on average” for digital asset trading. The investigation focuses on the platform's promotional message and business model, in particular, on payment for the order flow (PFOF), which regulators say may contradict the company’s advertised pricing advantage.
The investigation follows a formal subpoena issued to Robinhood, seeking detailed internal documents on marketing, pricing structures, and Florida user trade data from 2024. Uthmeier said his office believes Robinhood’s cost-related claims may violate the state’s Deceptive and Unfair Trade Practices Act.
The investigation focuses on the Robinhood revenue scheme, which involves routing client orders to third-party market makers in exchange for payments. This PFOF system has the potential to result in less favorable prices for users, leading to uncertainty about whether the actual trading cost would be higher than that of other providers.
Uthmeier emphasized the importance of transparency in crypto transactions and said the platform’s “best bargain” language may mislead users. “When consumers buy and sell crypto assets, they deserve transparency in their transactions,” he said.
This is not the first time the company’s model has faced scrutiny. In 2020, the U.S. Securities and Exchange Commission fined Robinhood $65 million over similar issues related to PFOF practices in equity trading. The Florida probe now narrows in on how this structure affects cryptocurrency transactions and whether the company’s marketing has accurately reflected its pricing.
A subpoena filed by the Florida Attorney General requests that Robinhood provide extensive documents, such as internal communications, marketing materials, training guides, and pricing methodologies. The request also extends to records on transaction costs, rebate mechanisms, and access to user trading record information.
The subpoena is due for response by July 31 and could determine whether the state pursues legal action or regulatory penalties. Robinhood’s legal team, led by General Counsel Lucas Moskowitz, defended the platform’s disclosures and stated that users receive clear information about trade costs, including spreads and revenue sources.
“We’re proud to be a place where customers can trade crypto at the lowest cost on average,” Moskowitz said in response to the investigation.
Also Read: Crypto Market Update: SEC Pushes Solana ETF, EU Questions Robinhood, Tornado Cash Legal Battle Ends
Robinhood’s case adds to a growing trend of increased scrutiny over crypto advertising. Global regulators have introduced more demanding conditions for platforms to sell digital assets. In the United Kingdom, the Financial Conduct Authority has already issued more than 220 warnings following the introduction of new regulations regarding the marketing of crypto.
In the United States, the SEC and the Federal Trade Commission are actively scrutinizing advertisements promising low charges or high returns, without sufficient disclosure.
