Roblox is facing growing legal and financial pressure as state authorities, federal regulators and investors raise fresh concerns about its safety record and business practices. The platform has more than 70 million daily users.
Yesterday, Louisiana Attorney General Liz Murrill filed a lawsuit against the California-based company, alleging it has failed to protect children from predators and sexual exploitation. The suit claims Roblox allows child sexual abuse material to circulate, lacks proper age verification and creates an environment where adults can target minors. Murrill said predators “thrive, unite, hunt and victimize kids” in spaces promoted as safe. The filing cites one case involving a Louisiana child who was allegedly approached by a man using voice-altering technology to pose as another young player.
The state is seeking a permanent injunction to stop Roblox from advertising its safety controls and is pursuing damages under Louisiana’s Unfair Trade Practices Act. The complaint comes amid rising concern over online safety, particularly on platforms popular with children. Roblox said in a statement it does not comment on pending litigation but rejected what it called “mischaracterizations” of its policies, pointing to its investment in moderation and reporting tools.
The Louisiana case is the latest legal challenge for Roblox. Earlier this year, a lawsuit in Michigan alleged the sexploitation of a young girl through the platform, adding to pressure from parents and advocacy groups who argue Roblox’s safeguards are falling short.
The U.S. Securities and Exchange Commission ended an investigation into Roblox in May. The probe began in October 2024 and was formally closed on May 13, 2025. Neither the SEC nor Roblox has shared details about the inquiry, leaving questions about why it was closed and whether any action was taken.
Roblox shares fell as much as 11 per cent today, though some outlets reported intraday losses closer to six per cent. Analysts pointed to overlapping concerns: the risk of costly litigation, reputational damage and uncertainty stemming from the SEC investigation. The decline reflects what market watchers describe as a broader loss of confidence in Roblox’s ability to convince parents and regulators it can keep children safe while maintaining rapid growth.
The disputes come at a critical moment for Roblox, which has expanded from a children’s gaming hub into a multibillion-dollar virtual economy where developers and brands profit from in-game experiences. Online games are hugely popular with young audiences, but critics warn the industry’s safety measures have not kept up with its rapid growth.
The next phase will hinge on whether Roblox can prove that its internal safeguards match the scale of its platform.