Florida’s chief prosecutor opened an investigation against trading platform Robinhood. He claimed that it had falsely promoted its crypto services on the market as being the least costly.
Lucas Moskowitz told Cointelegraph, Robinhood’s General Counsel, that its platform was transparent with regard to fees and clients were able to trade cryptocurrency at a low cost.
James Uthmeier – Florida Attorney General – released a press release on Thursday. accused Robinhood is accused of violating Florida’s Deceptive and Unfair Practices Act and has issued subpoenas asking for documents.
“Crypto is a vital component of Florida’s financial future,” What is the best time to buy? “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 says that its site allows traders to trade with confidence. buy and sell crypto Average US prices are the lowest.
The Attorney General claims that payment for orders flow is the cause
Robinhood generates revenue through payment for order flow The Florida Attorney General alleges that the PFOF makes the platform expensive. “third parties that pay Robinhood for order flow might have to charge less favorable prices” To be successful is to make money.
Brokerage firms using PFOF Receive a commission for sending orders to certain market makers or exchanges and having them execute trades. This is usually expressed in fractions per penny.
In a December 2023 CNBC interview, Robinhood CEO Vlad Tenev defended The practice was banned amid fears that brokers were not always acting in the best interest of their clients.
Robinhood agreed To settle allegations from the SEC, Robinhood will pay a fine of $65 million in December 2020. This is without admitting guilt.
Robinhood argues that its operation is transparent
Robinhood’s General Counsel Lucas Moskowitz spoke to Cointelegraph. “disclosures are best-in-class.”
“We disclose pricing information to customers during the lifecycle of a trade that clearly outlines the spread or the fees associated with the transaction and the revenue Robinhood receives,” He said.
“We are proud to be a place where customers can trade crypto at the lowest cost on average,” Moskowitz added.
Robinhood must respond by the end of the month to the subpoena.
Related: Private companies line up to join Robinhood’s tokenized equity platform: CEO
Stocks at the close of Trading
The stock market has reacted to the Florida investigation by Robinhood’s investors. closing In Thursday’s trading, the crypto market rallied to push up prices by 4%.
The price is only $1.08 away from the all-time record high.
In after-hours trades, however, the share price fell to $97.23, a decrease of 1.49 %.
The company’s stock has risen 30% over the past 30 days, a rally that is credited with boosting its share price. been attributed to its strategic embrace The blockchain and tokenization.
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Source: cointelegraph.com
