Robinhood Crypto is under investigation in Florida for allegedly announcing its platform as the least expensive way to buy cryptography.
In a press release on Thursday, Florida’s attorney general James Uthmeier said his office has evidence to suggest that cryptography merchants really pay more, on average, when Robinhood is used than when competing platforms are used.
“Crypto is a vital component of Florida’s financial future and the president [Donald] Trump’s efforts to advance the cryptography market will make the United States stronger and rich. When consumers buy and sell cryptographic assets, they deserve transparency in their transactions, “said Uthmeier.” Robinhood has affirmed that it is the best bargain, but we believe that these representations were misleading. “
In the heart of Uthmeier’s accusation is Robinhood’s payment for orders flow (PFOF) Business Model. PFOF allows Robinhood to offer a trade without commissions by generating income by enrutating their customer operations through market manufacturers in exchange for a gain cut. The critics of the practice, which Robinhood also uses for the trade of shares, have complained that PFOF presents an inherent interest conflict, which could encourage the company to enruta customer shops through the market manufacturer that offers the largest amount of commission, not the best price for customers.
In 2020, Robinhood paid $ 65 million to resolve a commission of values and values of the US. (SECOND) Application action claiming that the company misrepresented the quality of its customer operations executions. Robinhood did not admit or denied the findings of the SEC. Under former President Gary Gensler, the SEC considered prohibit PFOF but finally did not. PFOF is prohibited in the United Kingdom and will be prohibited in the European Union from next year.
Robinhood’s CEO, Vlad Tenev, has long defended the practice, telling CNBC in 2023 that PFOF was “inherently here to stay.”
“Our disseminations are the best in their class: we disseminate customer price information during the life cycle of a trade that clearly describes the propagation or rates associated with the transaction and income Robinhood receives. We are proud to be a place where customers can exchange cryptography at a lower cost on average,” said the general advisor of the Robinhouse markets Lucas Moskowitz in a statement by mail electronic
The Ushmeier citation is looking for a large amount of Robinhood information, including documentation of how the platform determines the prices of transaction reimbursements or PFOF practices with market manufacturers, documents that contain comparative price analysis of other cryptographic exchanges and documents related to the sale or access of commercial user crypto data.
Robinhood has until the end of the month to respond to Uthmeier’s summons.
