Attorney General Accuses Robinhood Crypto of Deceptive Advertising
Florida’s Attorney General has opened a formal investigation into Robinhood Crypto LLC over allegations that it misled consumers by promoting its platform as the “least expensive way to purchase crypto.” According to state officials, no substantiated evidence was provided to support this marketing claim.
Attorney General James Uthmeier stated that Robinhood’s cost-related promotions may violate Florida’s Deceptive and Unfair Practices Act, a consumer protection law designed to prevent false advertising in financial services.
“Robinhood has long claimed to be the best bargain, but we believe those representations were deceptive,” Uthmeier said.
Subpoena Issued as AG Demands Transparency
The state has issued a subpoena to Robinhood Crypto, requesting internal communications and any data backing its statements about offering “the most crypto for your money.”
The AG’s office emphasizes that Florida consumers deserve accurate information when buying or selling digital assets, especially as the state positions itself as a growing hub for blockchain innovation.
“Crypto is a vital component of Florida’s financial future,” Uthmeier added, noting broader support from President Trump to expand the crypto market nationally.
The Controversy: Commission-Free but Not Cost-Free
Robinhood Crypto operates on a commission-free model, but critics have long pointed out that this doesn’t necessarily mean trades are cheaper. The company earns revenue through Payment for Order Flow (PFOF) — a practice where customer trades are routed to third-party market makers who compensate Robinhood for the order traffic.
While this allows Robinhood to offer zero upfront fees, users may receive less favorable execution prices compared to platforms that charge visible commissions. Florida regulators argue that these hidden costs make the company’s “lowest cost” claims questionable.
Market Impact and Next Steps
Shares of Robinhood Markets (NASDAQ: HOOD) closed up 4.4% at $98.70 on Thursday despite the legal development, according to Yahoo Finance.
As the investigation unfolds, Robinhood could face regulatory penalties or be required to revise its marketing approach. The company has not publicly responded to the allegations as of this writing.
Transparency in crypto pricing is becoming a critical legal battleground as states push for clearer consumer protections in the digital asset space.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.