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

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

In an announcement Tuesday, 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 law/anti-money laundering obligations,” as well as cybersecurity failures that allegedly violate New York regulations . According to Harris, Robinhood’s crypto unit will also need to hire an independent consultant to assess the company’s compliance and remediation efforts.

“As their business grew, Robinhood Crypto did not invest adequate resources and attention to develop and maintain a culture of compliance,” Harris said. “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.”

#ICYMI: DFS Superintendent Harris Announces $30 Million Penalty to Robinhood Crypto for Significant Anti-Money Laundering, Cybersecurity, and Consumer Protection Violations. Read more: https://t.co/TUD2SwmOcw

— NYDFS (@NYDFS) August 2, 2022

According to the NYDFS consent order, the dept done an examination of Robinhood Crypto between January and September 2019, claiming that it had “found serious deficiencies in RHC’s compliance function in several areas.” The NYDFS then launched 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 those violations were allegations that Robinhood Crypto failed to transition to an adequately sized transaction monitoring system or “dedicate sufficient resources to adequately address risks.” In addition, the financial regulator alleged that Robinhood did not “maintain on its website a telephone number to receive customer complaints” as part of an oversight agreement.

In a statement to Cointelegraph, Robinhood’s associate general counsel for litigation and regulatory enforcement, Cheryl Crumpton, said the company had reached an agreement in principle with the NYDFS in 2021 and disclosed the matter in its filings public According to Crumpton, Robinhood made “significant strides in building industry-leading legal, compliance and cybersecurity programs.”

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

In June 2021, the US Financial Industry Regulatory Authority fined Robinhood about $70 million for allegedly causing “widespread and significant harm” to thousands of users and showing “systemic oversight failures” from September of 2016. At the time of publication, HOOD shares were trading at $9, having fallen approximately 0.3% in the last 24 hours.





Source link

You May Also Like

About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!