According to the reports, the main value regulator of Massachusetts has launched an investigation into Robinhood on the recent decision of the popular commercial platform to launch a prediction market center in the application that allows customers to bet on the result of the events, including the matness claims of March.
According to a Reuters Monday report, Massachusetts Secretary of State, Bill Galvin, a notoriously aggressive regulator, sent Robinhood a citation last week looking for information about the number of Robinhood users in Massachusetts who have requested exchange contracts for university sports events and search for copies of marketing materials related to Robinhood.
“This is just another trick of a company that is very good in tricks to attract investors away from solid investment,” Galvin told Reuters. Galvin’s office confirmed the investigation to Coindesk, added that Robinhood’s response to the citation will be presented on April 3.
The Robinhood prediction market, which works with the Basic Products Future Trade Commission (CFTC), Kalshi, launched on March 17 with event contracts related to madness, as well as another linked to the upper limit of the Fed Target fund rate in May. At the time of the launch, Robinhood told Coindesk that he had been in communication with the CFTC “in recent weeks” before launch.
A Robinhood spokesman reiterated that the event contracts offered through his prediction market hub were “regulated by the CFTC and offered through entities registered by CFTC.”
“Prediction markets have become increasingly relevant to retail and institutional investors equally, and we are proud to be one of the first platforms to offer these products to retail customers safely and regulatedly,” the spokesman added.
The negotiation platform previously tried to launch its prediction market center in February, before the Super Bowl, but delayed the launch at the request of the CFTC.
