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Robinhood Crypto Faces Legal Scrutiny Over Fees
Robinhood Crypto – Florida Attorney General James Uthmeier has launched an official investigation into Robinhood Crypto, accusing the popular trading platform of misleading customers by claiming to be the cheapest way to buy digital assets. The probe centers on whether Robinhood’s advertising falsely represents the true cost of trading on its platform.
Allegations of Deceptive Marketing and Business Practices
In a statement, Uthmeier said,
“Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive.”
The investigation alleges that Robinhood Crypto may be violating Florida’s Deceptive and Unfair Trade Practices Act by presenting potentially false cost information to consumers. The Attorney General’s office has issued a subpoena demanding internal documents, including marketing materials and detailed trade data of Florida users for 2024.
Focus on Robinhood’s Controversial Payment for Order Flow Model
Unlike traditional brokers that charge direct commissions, Robinhood makes money through a payment for order flow model. This means Robinhood routes trades to third-party firms, which pay for the chance to take the opposite side of customer trades. Critics argue this can result in higher costs or worse trade execution for users.
This practice previously drew a $65 million fine from the SEC in 2020 for lack of transparency. Now, Florida’s probe targets whether Robinhood’s claims of offering the “lowest cost on average” for crypto trading are truthful, or if customers actually pay more than on competing platforms.
Regulatory Climate and Consumer Protection Focus
The investigation comes amid evolving crypto regulation under the Trump administration, with recent SEC decisions easing federal scrutiny on crypto companies, including Robinhood. However, Florida’s inquiry is specifically focused on consumer protection, highlighting growing concerns about deceptive advertising in the crypto industry.
What Robinhood Faces Next
The subpoena demands extensive documentation, including how Robinhood prices transaction rebates and how employees are trained to discuss trading costs with users. Legal experts say Robinhood will need to produce clear evidence backing its pricing claims and disclose the impact of payment for order flow on user costs.
Robinhood has yet to comment publicly on the investigation. The deadline for the subpoena response is July 31, 2026.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
