Robinhood’s cryptocurrency division $30 million fine by the New York Department of Financial Services over alleged anti-money laundering and cybersecurity breaches (via wall street journal). This is the state’s first enforcement action related to cryptocurrencies.
The settlement resolves an investigation launched by the NYDFS last March, revealed by Robinhood. in the filing with the Securities and Exchange Commission company went publicRobin Hood first NYDFS estimates it could fine the company up to $15 million,later modified the submission Reflecting an estimated $30 million in fees.
According to NYDFS, Robinhood Crypto’s cybersecurity program had “significant failures” and “did not fully address” the company’s operational risks. The NYDFS also said that Robinhood’s cryptocurrency division had “serious deficiencies” in its anti-money laundering compliance program and did not post a dedicated phone number on its website to handle customer complaints, citing consumer protection laws. alleging a violation of
“As the business has grown, Robinhood Crypto has failed to dedicate adequate resources and attention to developing and maintaining a culture of compliance. It led to a serious breach,” NYDFS said in a statement.
“We are pleased that a settlement was reached in principle last year and that the settlement previously disclosed in public documents is now final,” Sheryl Crampton said. Associate General Counsel for Robinhood Litigation and Regulatory Enforcement. “We have made significant progress in building industry-leading legal, compliance, and cybersecurity programs, and we will continue to prioritize this work to best serve our customers.”
In 2020, the SEC indicted Robin Hood $65 million allegedly misleading customers about how revenue worksLast June, the Financial Industry Regulatory Authority (FINRA) Robinhood fined about $70 million To resolve claims for the trading platform’s failure to protect its customers. Around the same time US Department of Justice Seizes Robinhood CEO Vlad Tenev’s Phone Under investigation as to how Robinhood handled it GameStop stock frenzy last year.