By Sagar V. Mankar 
Roblox Corporation is currently under investigation by the U.S. Securities and Exchange Commission (SEC). The nature of the inquiry remains unclear, but the SEC has confirmed that it is an “active and ongoing investigation.”
According to Bloomberg News, which obtained the information through a Freedom of Information Act (FOIA) request, the SEC acknowledged the existence of enforcement but could not disclose details, as doing so could potentially interfere with ongoing enforcement proceedings. “We have confirmed with Division of Enforcement staff that there are responsive emails between Enforcement staff referencing Roblox and that these emails are a part of an active and ongoing investigation,” the commission stated.
In November 2024, Hunterbrook Media first reported the existence of the SEC’s investigation, citing a similar FOIA request.
Concerns Over Child Safety and Business Practices
While we don’t the exact nature of the investigation, a report by Hindenburg Research back in October highlighted various issues that might have linked to this regulatory scrutiny. The report accused Roblox of misrepresenting its daily active user (DAU) figures and failing to address child safety risks adequately.
The research alleged that Roblox inflated key metrics such as engagement hours by an estimated 100%. The firm claimed that the company overstated its DAU figures by anywhere from 25% to 42%, misleading investors, regulators, and advertisers. Roblox has previously acknowledged that DAUs “are not a measure of unique individuals accessing Roblox,” as one person may have multiple accounts. However, Hindenburg argued that the company was “intentionally” conflating DAUs and individual users to create the illusion of a larger active player base.
The report also suggested that bot accounts might significantly impact engagement data. Hindenburg hired a technical consultant to analyze player engagement, examining 297.7 million rows of real-time player data across 7,200 top Roblox games and 2.1 million servers. The consultant found that the average playtime was only 22 minutes per day—far lower than Roblox’s reported 2.4 hours per user. Hindenburg further alleged that bot accounts remained logged in for over 24 hours at a time, artificially inflating engagement metrics. The firm claimed that Roblox incentivized developers to create AFK (away-from-keyboard) games to boost engagement, ultimately distorting data presented to stakeholders.
In response, Roblox dismissed these allegations, stating that Hindenburg’s claims were misleading and driven by its financial interest as a short seller. “The authors are short sellers and have an agenda irrespective of the substance of Roblox’s business model and results. Roblox’s topline is growing quickly,” the company asserted.
To address child safety concerns, Roblox introduced new parental control features in November 2024. These updates allowed parents to manage their child’s account, monitor their friend list, set spending limits, and regulate screen time. However, some employees have reportedly expressed doubts about the effectiveness of these measures. As per Bloomberg, current and former employees described efforts to curb online predators as a “Sisyphean task,” indicating the persistent and challenging nature of the problem.
While the SEC’s investigation is still in its early stages, Roblox has yet to publicly comment on the matter.