NEW YORK (AP) — The crypto division of online brokerage Robinhood will pay a $30 million penalty to New York state for failing to comply with regulations governing money laundering and cybersecurity, the Department announced Tuesday of Financial Services of the state.
The department said an review of Robinhood Crypto trades from January 24, 2019 to September 30, 2019, found that the company’s compliance with banking regulations had not kept up with its growth.
“As its business grew, Robinhood Crypto failed to invest adequate resources and attention to develop and maintain a culture of compliance, a failure that resulted in significant violations of the Department’s cybersecurity and anti-money laundering regulations,” Adrienne A. Harris, Superintendent. of the state Department of Financial Services, he said in a news release.
Department of Financial Services officials said Robinhood Crypto incorrectly certified to the state that it complied with transaction control and cybersecurity regulations despite its deficiencies in those areas. Also, officials said, the company did not provide a dedicated phone number for consumer complaints on its website, as required.
In addition to paying the $30 million penalty, Robinhood Crypto will have to hire an independent consultant who will assess the company’s regulatory compliance, officials said.
Cheryl Crumpton, associate general counsel at Robinhood Markets Inc., said in a statement: “We are pleased that the agreement in principle reached last year and previously disclosed in our public filings is now final. We have moved forward significantly in building industry-leading legal, compliance and cybersecurity programs, and we will continue to prioritize this work to better serve our customers.”