Policy, Robinhood, Massachusetts, Investigations Robinhood launched its in-app prediction markets hub final week, permitting customers to guess on the end result of March Madness matchups.
Massachusetts’ prime securities regulator has reportedly launched a probe into Robinhood over the favored buying and selling platform’s latest resolution to launch an in-app prediction markets hub that enables prospects to guess on the end result of occasions, together with March Madness match-ups.
According to a Monday report from Reuters, Massachusetts Secretary of State Bill Galvin — a notoriously aggressive regulator — despatched Robinhood a subpoena final week looking for details about the variety of Robinhood’s customers in Massachusetts which have requested to commerce school sports activities occasions contracts, and looking for copies of Robinhood’s associated advertising and marketing supplies.
“This is just another gimmick from a company that’s very good at gimmicks to lure investors away from sound investing,” Galvin advised Reuters. Galvin’s workplace confirmed the investigation to CoinDesk, and added that Robinhood’s response to the subpoena is due on April 3.
Robinhood’s prediction market, which is powered by the Commodity Futures Trading Commission (CFTC)-regulated Kalshi, launched on March 17 with March Madness-related occasion contracts, in addition to one other linked to the higher certain of the target fed funds rate in May. At the time of the launch, Robinhood advised CoinDesk that it had been in communication with the CFTC “in recent weeks” main as much as the launch.
A spokesperson for Robinhood reiterated that the occasion contracts supplied by way of its prediction markets hub have been “regulated by the CFTC and offered through CFTC-registered entities.”
“Prediction markets have become increasingly relevant for retail and institutional investors alike, and we’re proud to be one of the first platforms to offer these products to retail customers in a safe and regulated manner,” the spokesperson added.
The buying and selling platform beforehand tried to launch its prediction markets hub in February, forward of the Super Bowl, however delayed the launch at the request of the CFTC.
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