Florida launches investigation into Robinhood Crypto..."Consumer deception"

The state of Florida in the United States has officially launched an investigation into the virtual asset (cryptocurrency) trading service 'Robinhood Crypto' operated by the financial services platform Robinhood. The probe stems from the determination that Robinhood's claim to be the 'lowest cost' trading platform may have misled consumers.

According to Reuters on the 10th (local time), James Uthmeier, the Florida Attorney General, announced that an investigation is underway to determine whether Robinhood Markets’ virtual asset division violated the state’s consumer protection law, known as the 'Deceptive and Unfair Trade Practices Act.' The prosecutor's office has issued a subpoena requesting internal documents from Robinhood, with a deadline set for the 31st of this month.

In a statement, Attorney General Uthmeier said, "Consumers should be guaranteed transparent information when trading virtual assets," adding, "Robinhood has long claimed to be the lowest cost trading platform, but we determined that this assertion could be deceptive."

Robinhood does not charge direct commissions for stock or virtual asset trades. Instead, it generates income through a 'PFOF (Payment for Order Flow)' approach, by passing customer orders to third-party market makers and receiving compensation in the process.

Regarding this, Lucas Moskowitz, Chief Legal Officer at Robinhood, explained, "We provide customers with clear disclosures on price information, fees, and spreads throughout the transaction process," and emphasized, "Robinhood is proud to offer a platform that allows trading of virtual assets at the lowest average costs."

Robinhood Crypto must submit documentation related to the subpoena to the Florida Attorney General's Office by July 31.