The Florida Attorney General has launched an investigation into Robin Hood’s crypto business, claiming the company misinterpreted its customers about the cost of trading digital assets.
Fintech companies have been accused of portraying trading apps as the cheapest way to buy cryptocurrency.
According to a news release, the Attorney General’s Office has sent a subpoena calling for internal records related to Robin Hood’s crypto products and how it sets fees and fees.
In the release, Florida Chief Financial Prosecutor Brad Usmeyer said, “Cryptocurrency is a key component of Florida’s financial future, and President Donald Trump’s efforts to advance the crypto market will make America stronger and wealthier.”
He adds, “When consumers buy and sell crypto assets, they deserve transparency in their transactions. Robinhood has long been claiming that it is the best bargain, but believes that their expressions are deceptive.”
The subpoena demands a wide range of materials. These include reporting lines within Robinhood, details of previous and current staff in the Marketing and Trading Department, Payment Orders (PFOF) arrangements, training guides, analysis of competitors, overall crypto and transaction data, and records of transactions made by Florida residents. It also includes advertising plans and internal discussions of fees and fees.
Robinhood must adhere to the end of July, the statement said.
The Robinhood business model routes customer orders to external companies rather than running transactions on their own books. These third parties pay Robinhood for the privilege to process the order. Known as PFOF, the company can offer transactions without a committee while earning income from partner companies.
The probe examines whether the system hides costs, undermines fairness, or leads to increased user fees.
Last year, the Securities and Exchange Commission adopted rules requiring securities companies serving retail investors to reveal detailed information on trade execution and pricing, including PFOF details. This change came during an overhaul of market transparency.
Robinhood shares have grown 150% this year
Robinhood shares have skyrocketed around 150% so far this year. The jump reflects strong trading volumes from retail customers, and we hope that regulated cryptocurrencies will drive fresh investor interest.
Robin Hood stock price. Source: Google Finance
About a 1/5th of the stock’s profit followed the Southern France event, when co-founder and CEO Vlad Tenev introduced new crypto features and distributed $1 million tokens tied to Spaxex and Openai.
According to a S&P Capital IQ poll, Robinhood’s earnings per share increased by approximately 10% per year until 2028.
Robinhood has recorded net profits from its public list in just one year, making future income forecasts difficult, especially given the volatile nature of the crypto market and its shifting policy under President Trump.
If revenues rise as expected, Robinhood shares will trade at approximately 56 times its 2028 profit. In comparison, our direct competitor, interactive brokers, have a higher reputation, and Charles Schwab is 14 times more valued. Together with the reviews of interactive brokers, Robinhood will need twice the expected revenue over the next three years.
