NY fines Robinhood Crypto $30M for skirting banking rules
The crypto division of the 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 state's Department of Financial Services announced Tuesday.
The department said an examination of Robinhood Crypto's operations from Jan. 24, 2019, through Sept. 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 the proper resources and attention to develop and maintain a culture of compliance-a failure that resulted in significant violations of the Department’s anti-money laundering and cybersecurity regulations,” Adrienne A. Harris, superintendent of the state's Department of Financial Services, said in a news release.
Department of Financial Services officials said Robinhood Crypto improperly certified to the state that it was in compliance with transaction-monitoring and cybersecurity regulations despite its deficiencies in those areas. Additionally, the officials said, the company failed to provide a dedicated phone number for consumer complaints on its website, as is required.
In addition to paying the $30 million penalty, Robinhood Crypto will be required to retain an independent consultant who will evaluate the company's regulatory compliance, the officials said.
Cheryl Crumpton, associate general counsel for Robinhood Markets Inc., said in a statement, “We are pleased the settlement in principle reached last year and previously disclosed in our public filings is now final. We have made significant progress building industry-leading legal, compliance, and cybersecurity programs, and will continue to prioritize this work to best serve our customers.”