Robinhood Crypto Probed Over ‘False’ Low-Price Claims

TL;DR

• Robinhood’s “lowest price” crypto declare is beneath state investigation for potential deceptive advertising.
• Florida AG subpoenaed inside information to confirm Robinhood’s declare of being the most affordable crypto buying and selling platform.
• Regardless of scrutiny, Robinhood pushes world crypto progress with $200M Bitstamp acquisition accomplished.

Florida Launches Investigation into Robinhood Crypto

Robinhood Crypto LLC is going through a state-level investigation in Florida over the way it promotes its buying and selling prices. The state’s Lawyer Basic, James Uthmeier, stated the platform’s declare to supply “the least costly solution to buy crypto” doesn’t seem like backed by proof.

“Robinhood has lengthy claimed to be the most effective discount, however we consider these representations had been misleading,” Uthmeier stated. 

The AG’s workplace has issued a subpoena for inside paperwork, together with any information supporting the declare that Robinhood affords the bottom buying and selling prices on common.

Advertising and marketing vs. Precise Prices

Robinhood operates as a commission-free platform however earns from routing trades to third-party companies via fee for order circulation. Florida officers say this observe might imply customers pay greater than anticipated, even when they aren’t charged upfront charges.

The state’s probe will have a look at whether or not prospects are given a full image of what they pay. Uthmeier added, 

“When customers purchase and promote crypto property, they deserve transparency of their transactions.”

SEC Closes Separate Probe into Robinhood Crypto

Whereas Robinhood now faces scrutiny in Florida, it just lately cleared a federal regulatory hurdle. The U.S. Securities and Alternate Fee ended its long-standing investigation into the corporate’s crypto unit with out taking motion. That call removes a significant impediment for Robinhood because it pushes deeper into digital property.

The corporate additionally despatched a proposal to the SEC final month, calling for up to date guidelines round tokenized real-world property. It requested regulators to deal with blockchain-based variations of property like actual property or shares the identical as their conventional kinds, somewhat than as derivatives.

Regardless of the state investigation, Robinhood is shifting forward with its world enlargement. As CryptoPotato reported, the corporate has accomplished a $200 million acquisition of Bitstamp, having access to prospects throughout Europe, the UK, and Asia. The transfer marks a shift towards serving bigger establishments alongside retail customers.

In the meantime, Robinhood shares ended Thursday at $98.70, up 4.4% for the day, in accordance with Yahoo Finance.