New York financial regulator fines Robinhood’s crypto division $30M

The New York Department of Financial Services, or NYDFS, has announced a $30 million penalty on Robinhood’s cryptocurrency arm for alleged violations related to anti-money laundering, cybersecurity and consumer protection laws.

In a Tuesday announcement, NYDFS superintendent Adrienne Harris said Robinhood Crypto will pay a $30 million penalty to the state “for significant failures in the areas of bank secrecy act/anti-money laundering obligations” as well as cybersecurity failures that allegedly violated New York regulations. According to Harris, Robinhood’s crypto unit will also be required to hire an independent consultant to evaluate the firm’s compliance and remediation efforts.

“As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance,” said Harris. “All virtual currency companies licensed in New York State are subject to the same anti-money laundering, consumer protection, and cybersecurity regulations as traditional financial services companies.”

According to the NYDFS’s consent order, the department conducted an examination of Robinhood Crypto between January and September 2019, alleging that it had “found serious deficiencies in RHC’s compliance function across multiple areas.” The NYDFS then began an enforcement investigation, finding that Robinhood’s crypto arm violated aspects of the Bank Secrecy Act, or BSA, and Anti-Money Laundering, or AML, regulations.

Among these violations were allegations Robinhood Crypto did not transition to an adequately sized transaction monitoring system o “devote sufficient resources to adequately address risks.” In addition, the financial regulator alleged Robinhood failed “to maintain on its website a telephone number for the receipt of customer complaints” as part of a supervisory agreement.

Related: Robinhood makes significant strides in crypto business in Q1 despite falling revenue

In June 2021, the U.S. Financial Industry Regulatory Authority penalized Robinhood for roughly $70 million for allegedly causing “widespread and significant harm” to thousands of users and exhibiting “systemic supervisory failures” starting as early as September 2016. At the time of publication, shares of HOOD were trading at $9, having fallen roughly 0.3% in the last 24 hours.

Cointelegraph reached out to Robinhood, but did not receive a response at the time of publication.

All Dutch and English crypto news!

CME Group plans to launch options on ETH futures prior to the Merge

Major derivatives marketplace Chicago Mercantile Exchange Group intends to launch options trading for its Ether futures products. In a Thursday announcement, the CME Group said that...

Blockchain venture capital funding down over 43% in July: Report

Typically a lagging indicator of the sector's health, the explosion of venture funding in the blockchain sector in 2021 and the first half of 2022...

Bitcoin ‘liveliness’ lowest since 2021 amid new 5-year BTC hodl record

Bitcoin (BTC) long-term holders are knuckling down as a record portion of the BTC supply stays dormant for years. Data from on-chain analytics firm Glassnode confirms...

Asia Broadband Inc. seeks to further unite the crypto and gold worlds

Asia Broadband, Inc. wants to further unite cryptocurrency and gold in a bid to improve the company's digital asset development group.   Asia Broadband, Inc. (OTC:AABB) announced...

Beste exchanges

Koop je crypto bij Bitvavo