Deutsch한국어日本語中文EspañolFrançaisՀայերենNederlandsРусскийItalianoPortuguêsTürkçePortfolio TrackerSwapCryptocurrenciesPricingIntegrationsNewsEarnBlogNFTWidgetsDeFi Portfolio TrackerOpen API24h ReportPress KitAPI Docs

Premium is discounted today! 👉 Get 60% OFF 👈

Robinhood Crypto Pricing Under Investigation for Deceptive Practices

8h ago
bullish:

0

bearish:

0

Share

Robinhood Crypto Pricing Under Investigation for Deceptive Practices

  • Florida Attorney General James Uthmeier has launched a formal investigation into Robinhood over its lowest-cost claims.
  • Authorities are examining Robinhood’s payment-for-order-flow revenue model, which routes trades through third-party market makers.

The Attorney General of Florida, James Uthmeier, has opened a formal investigation into the popular trading platform Robinhood. He asked whether the claims of the company that it provides the cheapest cryptocurrency trading services are true and valid.

The inquiry focuses on the claims that Robinhood breached the Florida Deceptive and Unfair Practices Act by making possibly deceptive marketing claims regarding its competitive pricing model of digital asset transactions.

Uthmeier has served a subpoena on Robinhood requesting detailed records of the company, citing the fear that the advertising statements made by the platform might not be true to the cost that users incur trading cryptocurrencies.

The attorney general particularly called out the revenue model of Robinhood that is based on payment for order flow agreements with third-party market makers and exchanges in order to execute transactions.

Such arrangements have the potential to generate increased costs to customers since third-party processors might offer less attractive prices to remain profitable and compensate Robinhood to route trading orders.

On its site, Robinhood boasts of the fact that traders can buy and sell cryptocurrencies at the lowest average prices in the US market.

Nonetheless, Florida authorities consider such representations to be misleading based on the business model and fee structure of the platform for conducting cryptocurrency transactions.

The legal team of Robinhood has reacted in defence. The General Counsel Lucas Moskowitz has claimed that the company has the best disclosure practices in the industry. He added that the company offers transparent pricing information during the trade process.

Moskowitz noted that customers are informed clearly of spreads, fees, and revenue earned by Robinhood on every transaction, and he insisted that the platform provides truly competitive prices.

The firm has had prior regulatory action, as it agreed to pay a hefty $65 million fine in December 2020 to resolve SEC charges of order execution claims.

The stock price of Robinhood rose by 4.4% on Thursday, finishing at $98.70 despite the investigation announcement due to the overall rise in the cryptocurrency market and investor trust. Moreover, the company must reply to the subpoena and supply requested documentation to the Florida investigation team by the end of July.

Highlighted Crypto News Today: 

‌Analyst Identifies Historically Bullish Formation in Dogecoin Chart: What’s Next For DOGE?

8h ago
bullish:

0

bearish:

0

Share
Manage all your crypto, NFT and DeFi from one place

Securely connect the portfolio you’re using to start.