Robinhood Markets Inc. is under investigation in Florida for allegedly deceptive practices in its cryptocurrency operations, misleading consumers about costs. The state Attorney General issued a subpoena demanding marketing materials and documents related to Robinhood’s crypto services and pricing. The firm has until the end of July to respond.

Florida Attorney General James Uthmeier stated that consumers deserve transparency in crypto transactions and that Robinhood’s claims of being the cheapest may be deceptive. Robinhood’s general counsel, Lucas Moskowitz, defended the company’s pricing transparency and touted it as offering the lowest cost for crypto trading on average.

Robinhood makes money through payment for order flow, where third-party firms pay for the chance to fulfill trades. This system allows for commission-free trading for users while generating revenue behind the scenes. The investigation will look into whether this system impacts fairness or transparency in crypto pricing and leads to higher fees for users.

The SEC implemented a rule last year requiring stock brokerages to disclose more information, including payment for order flow, to ensure transparency and fairness for ordinary investors. This move is part of a broader regulatory overhaul to protect investors.

Read more at Yahoo Finance: Robinhood’s Crypto Trading Promotions Probed by Florida AG