Florida Attorney General James Uthmeier has initiated an investigation into Robinhood’s cryptocurrency trading operations, focusing on potential consumer harm stemming from its payment for order flow (PFOF) model. The probe examines whether the brokerage’s order routing practices resulted in less favorable crypto trade prices for customers than available on other platforms.
Robinhood General Counsel Lucas Moskowitz staunchly defended the platform’s practices, asserting full transparency and competitive pricing for crypto trades. This challenge follows the company’s $65 million settlement with the SEC in 2020 over similar disclosures in equity trading order flows, though Robinhood admitted no wrongdoing in the prior case.
Despite ongoing regulatory scrutiny, Robinhood shares closed 4.4% higher at $98.70, reflecting investor confidence amid the investigation. The Florida inquiry spotlights broader concerns about consumer protection and fee transparency across cryptocurrency trading platforms as regulators push for stricter compliance standards.
Concurrently, Robinhood continues expanding its U.S. crypto services, recently introducing Ethereum staking capabilities while navigating increased regulatory oversight of its operations.