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July 11, 2025

Robinhood Faces Florida Investigation for ‘Low-Cost’ Crypto Marketing Shalini Nagarajan | usagoldmines.com

Florida Attorney General James Uthmeier has opened an investigation into Robinhood Crypto, alleging the platform may have misled customers by marketing itself as the cheapest way to buy digital assets.

In a statement on Thursday, the attorney general’s office said it issued a subpoena to Robinhood’s crypto unit, seeking internal documents, marketing materials and pricing data. The probe aims to determine whether the company violated Florida’s Deceptive and Unfair Trade Practices Act.

“When consumers buy and sell crypto assets, they deserve transparency in their transactions,” Uthmeier said. “Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive.”

Robinhood’s Zero-Commission Model Masks Revenue From Trade Routing

Robinhood allows users to trade cryptocurrencies and stocks without charging direct commissions. However, the company generates revenue through a process called payment for order flow, or PFOF. Under this model, Robinhood routes trades to third-party market makers, who pay the firm for the opportunity to execute those trades.

Critics argue that PFOF can obscure true costs for customers, potentially resulting in worse prices. Although legal and disclosed in filings, the practice has drawn regulatory scrutiny in recent years, especially in volatile markets.

The Menlo Park-based company is also under pressure abroad. Earlier this week, EU regulators launched investigations into Robinhood’s blockchain-based “Stock Tokens,” which have become a source of controversy after OpenAI publicly disavowed any connection to the investment product launched on June 30.

Robinhood Defends Fee Transparency as State Probe Examines Hidden Costs

In its announcement, the AG’s office accused the Menlo Park-based company of “falsely promoting” its platform as the “least expensive way to purchase crypto.” It added that the subpoena, which demands a response by July 31, would help determine if PFOF compromises transparency or results in hidden fees for users.

Responding to the investigation, Robinhood’s General Counsel Lucas Moskowitz reportedly said the company clearly discloses pricing during every trade and shows users any spread or fees applied. “We are proud to be a place where customers can trade crypto at the lowest cost on average,” he said.

Robinhood didn’t return Cryptonews’ request for comment by press time.

According to regulatory filings, PFOF made up roughly 15%-20% of Robinhood’s revenue in 2023. While the company has defended the model as a way to keep trading accessible, regulators and consumer advocates remain wary of the potential for behind-the-scenes costs.

The post Robinhood Faces Florida Investigation for ‘Low-Cost’ Crypto Marketing appeared first on Cryptonews.

 

This articles is written by : Nermeen Nabil Khear Abdelmalak

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