Massachusetts securities regulators are reportedly getting ready to file a grievance in opposition to a significant cryptocurrency-friendly buying and selling platform, Robinhood.

In line with a Dec. 16 report by the Wall Road Journal, Massachusetts regulators alleged that Robinhood’s advertising and marketing illegally focused inexperienced traders. 

In line with a closing draft of a 20-page administrative grievance reviewed by the WSJ, the enforcement arm of the Massachusetts Securities Division mentioned that the Robinhood uncovered Massachusetts traders to “pointless buying and selling dangers” by “falling far wanting the fiduciary normal.” The authorities anticipate to file the grievance on Dec. 16, the report notes.

In line with the WSJ, the grievance got here from the workplace of William Galvin, the Secretary of the Commonwealth of Massachusetts. Galvin reportedly mentioned that his workplace filed the grievance to guard younger Massachusetts traders. Robinhood’s buying and selling platform is “offered as some kind of recreation that you just may have the ability to win,” he mentioned. Robinhood reportedly had practically 500,000 clients in Massachusetts as of early December, with accounts totaling over $1.6 billion.

A spokesperson at Robinhood advised Cointelegraph that the agency has not seen the grievance:

“Robinhood has opened up monetary markets for a brand new era of people that had been beforehand excluded. We’re dedicated to working with integrity, transparency, and in compliance with all relevant legal guidelines and laws. Now we have not seen the grievance, however we’ve and can proceed to work carefully and cooperatively with all of our regulators.”

As of publication, the courts had not registered receipt of the grievance.

Robinhood has skilled a troubled 2020. In June, Forbes broke a tragic story of the demise of 20-year-old Alex Kearns, who dedicated suicide after seeing a $730,000 unfavourable steadiness on his Robinhood app. Robinhood founders subsequently released a press release pledging to tighten eligibility standards, instructional sources and upgrades to its consumer interface for purchasers buying and selling.

The platform has additionally suffered some technical points this yr. As Cointelegraph reported, Robinhood confronted a number of outages in March 2020, leading to downtime for a number of providers and huge losses by merchants. A gaggle of affected customers subsequently filed a class-action lawsuit in opposition to Robinhood, accusing the platform of leaving its customers unable to execute trades or change restrict orders.