The main prosecutor of Florida has opened an investigation into the Robinhood negotiation platform, alleging that she had falsely promoted her crypto services as the cheapest on the market.
However, Lucas Moskowitz, the lawyer general of Robinhood, told Cintelegraph in a press release that the platform was transparent on his fees, and that customers exchange the crypto at the lowest cost on average.
In a statement Thursday, the Florida Attorney General James Uthmeier accused Robinhood of having broken the misleading and unfair law of Florida and published a summons requesting various documents from the platform.
“The crypto is a vital element of the Florida financial future”, and when “consumers buy and sell cryptographic assets, they deserve the transparency of their transactions,” said Uthmeier.
“Robinhood has long claimed to be the best deal, but we believe that these representations were misleading.”
On its website, Robinhood Claims Traders can buy and sell crypto at the lowest costs on average in the United States.
The Attorney General requests payment of the order flow is to blame
Robinhood generates income thanks to the payment of the order flow (PFOF), which, according to the prosecutor General of Florida, makes the platform more expensive because “third parties who pay the robination for the order of orders could have to charge less favorable prices” to be profitable.
Brokerage companies using PFOF receive costs to direct orders and execute transactions to a particular market or in exchange, generally in fractions of a penny by action.
In an interview of December 2023 CNBC, the CEO of Robinhood, Vlad Tenev, defended the practice among the concerns that this created a conflict of interest where brokers do not always act in the best interest of customers.
Robinhood agreed to pay a fine of $ 65 million in December 2020, without admission of guilt, to settle the accusations of the dry alleging, among others, that Robinhood wrongly affirmed that the orders of his customers were executed at prices lower than other brokers.
Robinhood maintains that its operations are transparent
Robinhood’s Advocate General Lucas Moskowitz told Cintelegraph that “disclosure is the best.”
“We disclose information on prices to customers during the life cycle of a business which clearly describes the gap or the costs associated with the transaction and the income fitting received,” he said.
“We are proud to be a place where customers can exchange the crypto at the lowest cost on average,” added Moskowitz.
Robinhood has until the end of July to respond to assignment.
In relation: Private companies are laid out to reach the Robinhood tokenized action platform: CEO
Make a stock when closing negotiations
Robinhood investors have apparently raised the news of the Florida’s news, the closure of the negotiation session on Thursday from 4.4% to $ 98.70 at the side of a cryptography market.
It’s just a stone throwing of its $ 100.88 summit.
However, in exchanges after opening hours, the action was slightly withdrawn to $ 97.23, representing a drop of 1.49%.
Last month, its shares organized a 30%rally, which was allocated to its strategic adoption of technology and the tokenization of blockchain.
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