Key Points:
- A $30 million fine was imposed on Robinhood’s cryptocurrency branch for “significant failures” in cybersecurity and anti-money laundering laws.
- According to the NYDFSA, the anti-money laundering and cybersecurity program at Robinhood Crypto division has lacked adequate staffing and did not have sufficient funding to address the risk.
- The New York State Department of Financial Services is enforcing this law for the first time in the bitcoin sector.
Details:
Robinhood’s cryptocurrency section took too long to switch from a manual transaction monitoring system to one more adequate for its user size and transaction volume.
The regulator claimed that Robinhood Crypto had broken the law by failing to keep a separate and dedicated phone number on its website for customer complaints, Robinhood Crypto allegedly violated regulations for consumer protection.
The amount is the most recent in a string of financial penalties regulators levied against Robinhood.
In 2020, Robinhood paid $65 million to settle an SEC probe over misleading customers information. In 2021, the Financial Industry Regulatory Authority (FINRA) fined Robinhood $70 million for outages and deceiving customers.
According to Cheryl Crumpton, associate general counsel of litigation and regulatory enforcement at Robinhood, the company has made “substantial progress” in developing its legal, compliance, and cybersecurity programs.
