Robinhood Crypto Probed Over ‘False’ Low-Fee Claims

TL;DR

• Robinhood’s “lowest value” crypto declare is underneath state investigation for potential deceptive advertising.
• Florida AG subpoenaed inner information to confirm Robinhood’s declare of being the most cost effective crypto buying and selling platform.
• Regardless of scrutiny, Robinhood pushes international 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 Common, James Uthmeier, mentioned the platform’s declare to supply “the least costly strategy to buy crypto” doesn’t look like backed by proof.

“Robinhood has lengthy claimed to be one of the best cut price, however we consider these representations had been misleading,” Uthmeier mentioned. 

The AG’s workplace has issued a subpoena for inner paperwork, together with any information supporting the declare that Robinhood presents 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 corporations by means of fee for order circulate. Florida officers say this follow could imply customers pay greater than anticipated, even when they aren’t charged upfront charges.

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

“When shoppers 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 Change Fee ended its long-standing investigation into the corporate’s crypto unit with out taking motion. That call removes a serious 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 international growth. As CryptoPotato reported, the corporate has accomplished a $200 million acquisition of Bitstamp, having access to clients 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 response to Yahoo Finance.