TALLAHASSEE, Fla.—Attorney General James Uthmeier has initiated an investigation into Robinhood Crypto, LLC. The inquiry includes issuing a subpoena to obtain internal documents from the company. Allegations suggest that Robinhood Crypto may be violating Florida’s Deceptive and Unfair Practices Act by misleadingly promoting its platform as the most cost-effective option for purchasing cryptocurrency.
“Crypto is a vital component of Florida’s financial future, and President Trump’s efforts to advance the crypto market will make America stronger and wealthier. When consumers buy and sell crypto assets, they deserve transparency in their transactions,” stated Attorney General James Uthmeier. “Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive.”
Robinhood is known as a platform for cryptocurrency and stock trading. It does not charge commissions but instead earns revenue through payment for order flow (PFOF), where third-party firms pay Robinhood to execute trades on behalf of customers.
The company attracts users with claims of offering the “lowest cost on average” for cryptocurrency trading, promising “the most crypto for your money.” However, evidence suggests that due to its PFOF model, trading on Robinhood might actually be more costly compared to competitors who offer all-inclusive trading costs.
To assess whether these practices exploit Florida investors, Attorney General Uthmeier has issued a subpoena requiring Robinhood to provide various documents including organizational charts, employee roles related to marketing and pricing structures, advertising materials about its cryptocurrency services, claims about low-cost trading offers, user fee disclosures, training materials concerning trade costs discussions with users, pricing determination methods for rebates or PFOF agreements with market makers, details of entities involved in PFOF agreements with Robinhood, competitor pricing analyses for cryptocurrency trades, policies regarding PFOF and transaction rebates in crypto trades, sale or access records of user data related to crypto trading costs or fees communication with Florida users during 2024 usage statistics among other requested information.
Robinhood Crypto must comply with this subpoena by July 31st.
