FLORIDA – Florida Legal professional Normal James Uthmeier stated Thursday that his workplace has submitted a subpoena to “uncover inside paperwork” belonging to Robinhood Crypto, LLC, after alleging that the corporate misled its prospects by promoting itself as the “least costly” way to buy cryptocurrency.
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Uthmeier claims that there’s proof supporting the notion that purchasing and promoting cryptocurrency on Robinhood’s platforms is dearer than buying and selling on different exchanges, regardless of the corporate’s guarantees that utilizing their providers offers prospects entry to “probably the most crypto on your cash.”
“Robinhood induces prospects to its platform by claiming to provide the ‘lowest price on common’ to commerce cryptocurrency and promising to ship prospects ‘probably the most crypto on your cash,’” the legal professional normal writes. “Nevertheless, there may be proof that buying and selling on Robinhood is definitely dearer than buying and selling on competing platforms.”
Robinhood, a inventory buying and selling platform that, according to the company, had almost 26 million funded prospects by the top of January. The alternate, as an alternative of charging a fee, earns its income by working with third-party companies that take the other aspect of a commerce posted by one of Robinhood’s customers, something known as a payment for order flow, or PFOF.
Uthmeier believes Robinhood’s reliance on PFOF is the principle motive why its messaging is deceptive, saying that the third events that Robinhood works with have the flexibility to “cost much less favorable costs to the Robinhood prospects they commerce with to be worthwhile.”
For that motive, the legal professional normal says he has requested copies of paperwork to be sure that Robinhood’s enterprise practices are in accordance with Florida regulation.
The complete record of requested paperwork will be found here.
Robinhood Crypto, in accordance to the legal professional normal, should reply to the subpoena by July 31.
In an announcement despatched to News4JAX, Robinhood stated the next:
Our disclosures are best-in-class — We disclose pricing info to prospects throughout the lifecycle of a commerce that clearly outlines the unfold or the charges related to the transaction and the income Robinhood receives.
We’re proud to be a spot the place prospects can commerce crypto on the lowest price on common.
Lucas Moskowitz, Normal Counsel, Robinhood Markets, Inc.
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