The Florida Attorney General’s Office has opened a formal investigation into Robinhood’s cryptocurrency trading arm, alleging that the company has misled customers about the true cost of trading digital assets on its platform. The probe focuses specifically on Robinhood’s marketing claims of offering the “lowest cost” crypto trading in the United States—a claim that state regulators believe may be deceptive.

According to Attorney General James Uthmeier, preliminary evidence indicates that users trading cryptocurrency on Robinhood may, in fact, be paying more than on competing platforms due to the company's payment for order flow (PFOF) model. This system, in which Robinhood routes user trades through third-party market makers in exchange for compensation, could prioritize Robinhood’s profit over users’ best execution prices.

“Our job is to protect Florida’s consumers, and early findings suggest Robinhood Crypto may not be delivering the value it promises,” said Uthmeier. “We’re going to get to the bottom of it.”

The AG’s office issued a civil investigative demand (CID)—Florida’s version of a subpoena—requesting that Robinhood turn over internal documents including training materials, pricing comparisons with competitors, marketing assets, and communications about how its crypto execution model operates.

Robinhood has until July 31, 2025, to comply.

Robinhood Responds

Robinhood’s General Counsel, Lucas Moskowitz, issued a statement pushing back against the allegations. He maintained that Robinhood Crypto offers industry-leading transparency and low trading costs. He also asserted that users are shown detailed disclosures, including trading spreads, applicable fees, and the company’s own compensation per trade.

“We stand by the quality and transparency of our crypto trading experience,” Moskowitz said. “We look forward to engaging with the Florida Attorney General’s Office.”

Crypto and PFOF: A Contentious Relationship

Robinhood’s business model—especially its PFOF structure—has been under scrutiny for years. While it allows the company to offer commission-free trades, critics argue that PFOF introduces a conflict of interest: the platform might prioritize routing trades to partners that pay the most, rather than those offering the best price for the customer.

This is not the first time Robinhood has been challenged over its execution quality. In 2020, the U.S. Securities and Exchange Commission (SEC) fined the company $65 million for failing to disclose how its PFOF model may have led to worse trade prices for customers.

Furthermore, the PFOF model is banned in the European Union and United Kingdom, and although it remains legal in the U.S., it continues to be a flashpoint in regulatory discussions.

Crypto Trading's Role in Robinhood’s Revenue

Robinhood’s crypto business has grown substantially over the past year. In its most recent earnings report, the company revealed that cryptocurrency transactions now account for 43% of all transaction-based revenue, underscoring just how vital the service is to the firm’s bottom line.

Yet, the growing regulatory pressure and legal uncertainty could present long-term risks. If regulators determine that Robinhood has violated consumer protection laws, the company could face legal penalties, forced changes to its platform, or be required to reimburse affected users.

What Comes Next

The Florida Attorney General’s office will now begin an in-depth review of the subpoenaed materials. The outcome of this investigation may influence how other states, or even federal regulators, scrutinize payment-for-order-flow practices in crypto markets. Robinhood’s ability to defend its practices with concrete, transparent data will be key to its reputation and continued regulatory compliance.