Robinhood Crypto Division Fined $30 Million
The cryptocurrency division of the retail investment platform Robinhood has been fined $30 million by the New York State Department of Financial Services (NYDFS), which claims that the company violated anti-money laundering and cybersecurity rules.
According to the report, NYDFS discovered the alleged deficiencies during the supervisory review and subsequent investigation. This is the first enforcement action of the regulator in relation to the crypto business.
The NYDFS stated that the Bank Secrecy Act and anti-money laundering compliance programs were not properly integrated into Robinhood. The regulator added that the company's cybersecurity program did not properly take into account operational risks, and its policy did not comply with the regulator's rules in the field of cybersecurity and virtual currency.
The investigation also revealed that by not having a dedicated phone number for consumer complaints on its website, Robinhood failed to comply with consumer protection requirements.
"DFS will continue to investigate and take action when any licensee violates the law or Department regulations that are critical to protecting consumers and ensuring the safety and reliability of institutions," said Superintendent Adrianne Harris.
Robinhood will now need to hire an independent consultant to assess compliance with the government regulatory authority's rules and remedial efforts.
Shares of the retail investment platform declined slightly at the opening on Tuesday, losing just over 1% after this news. On Wednesday, the company will publish its earnings report for the second quarter.
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