Robinhood Crypto LLC is facing a state-level investigation in Florida regarding its claims about trading costs.
Investigation for Misleading Advertising
Florida Attorney General James Uthmeier stated that the platform's claim to offer 'the least expensive way to purchase crypto' does not seem to be supported by evidence. 'Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive,' Uthmeier said.
Marketing vs. Actual Costs
Robinhood operates as a commission-free platform, but it earns from routing trades to third-party firms through payment for order flow. Florida officials say this practice may mean users pay more than expected, even if they aren’t charged upfront fees. Uthmeier added, 'When consumers buy and sell crypto assets, they deserve transparency in their transactions.'
SEC Closes Separate Investigation
While Robinhood now faces scrutiny in Florida, it recently cleared a federal regulatory hurdle. The U.S. Securities and Exchange Commission ended its long-standing investigation into the company's crypto unit without taking action. This decision removes a major obstacle for Robinhood as it pushes deeper into digital assets.
Despite the state investigation, Robinhood is moving ahead with its global expansion, having completed a $200 million acquisition of Bitstamp.
