The best securities organizer in Massachusetts began an investigation into the recent Robinhood decision to launch a predictive market. This platform allows users to bet on the results of various events, including the famous “March Madness”.
the investigationForeign Minister Bill Galvin seeks to scrutinize the effects of linking sports betting to mediation accounts, especially among younger investors.
Robinhood defends the new prediction markets
Galvin expressed his concerns in interview With Reuters, he said that Robinhood's actions can be considered a tactic to attract young investors through what he described as a “gambling”. “This is just a way to circumvent the other from a very good company in tricks to attract investors away from proper investment,” he said.
As part of the investigation, the GALVIN office issued a summons to Robinhood, and asked for detailed information about its users in Massachusetts who expressed their interest in university sporting events.
these Event contracts Enabling merchants to bet on specific results, creating chances of profit in various sectors, including sports, entertainment and politics. However, its growing popularity sparked a controversial debate, as supporters saw them as a new category of assets and critics that resemble them with gambling.
The summons seeks not only to identify users who have brokerage accounts who have requested trading these contracts but also require copies of RobinHood marketing materials.
A Robinhood spokesman defended the prediction markets, stressing that it is being organized by the American Commodity Futures Trading Committee (CFTC) and is presented through CFTC registered entities.
“The prediction markets are increasingly relevant for both retail investors and institutions,” the spokesperson, with a focus on Robinhood's commitment to providing these products in a safe and organized manner.
Renewing legal challenges
Robinhood reported that its prediction markets will be available throughout the United States via the KALSHIEX derivative platform, allowing customers to bet on the results of NCAA tournaments.
Follow this launch on March 17, giving up the company's recent events for Super Bowl, which occurred just one day after submitting it at the request of CFTC.
despite OrganizationalA CFTC spokesman confirmed that the agency did not find legal reasons to prevent Robinhood from submitting these contracts, as they are inserted into the CFTC registrar.
However, Galvin's investigation focuses on the internal communications of Robinhood regarding the decision to submit university sporting events, especially in light of the previous guidance of CFTC.
This investigation is not the first legal challenge that Robenol faced from the Jalfin office. In 2020, the platform was accused of encouraging “inexperienced investors” to conduct “risky deals” through GAMIDIED features, such as celebrating sweets for every implemented trade. The company ultimately agreed to pay $ 7.5 million in 2024 to resolve these claims and relevant issues from investigating data security.
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