Massachusetts’s best securities regulator launched an investigation into Robinhood’s decision to initiate a predictive-Sunday center. This platform allows users to bet on the results of various events, including popular NCAA “March Madness” College basketball tournaments.
. investigationThe leadership of Foreign Minister Bill Galvin is trying to examine the results of connecting sports betting, especially among young investors, to the mediation accounts.
Robinhood defends new forecasting markets
Galvin concerns report With Reuters, Robinhood’s actions can be seen as a tactical to attract young investors with what he describes as “gambling activity .. “This is another trick than a very good company to cheat to remove investors from solid investment.” He said.
As a part of the investigation, Galvin’s office published a court subpoena to Robinhood and asked for detailed information about users who stated that they were interested in Trade College Sports Activity Agreements about their users in Massachusetts.
These Event Contracts It enables traders to bet on certain results and create opportunities for profit in various sectors, including sports, entertainment and policy. However, their increasing popularity led to a controversial debate, the fans see them as a new class of being, and critics who resemble them gambling.
The court not only defines users who have intermediaries who want to trade these contracts, but also demand copies of Robinhood’s marketing materials.
Robinhood spokesman defended the estimation markets by claiming that they were organized by the US Commodity Futures Trade Commission (CFTC). CFTC registered assets.
Sözcü emphasized the commitment of Robinhood’s commitment to provide these products in a safe and regulated manner.
Renewed Legal Challenges
Robinhood said that the estimation markets will be available throughout the US through the derivative trade platform Kalshiex and that customers have made bets on results for NCAA tournaments.
This launch on March 17 followed the company’s event contracts for Super Bowl, which took place only one day after being introduced at the request of the CFTC.
Despite regulatory reviewA CFTC spokesman confirmed that the agency could not find any legal justification to prevent Robinhood from submitting these contracts, as the agency was listed in a CFTC registered stock exchange.
However, Galvin’s investigation focuses on Robinhood’s internal communication, especially in the light of CFTC’s previous guidance, to present university sports activity contracts.
This investigation is not the first legal challenge that Robinhood faces from Galvin’s office. In 2020, the platform was accused of encouraging “inexperienced investors” to make “risky trade iyle through gamified features such as celebration confetti for each trade. The company agreed to pay 7.5 million dollars in 2024 to solve these claims and related problems from a data security violation investigation.
The prominent picture from Shutterstock is graphics from tradingView.com
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