NY Fines Robinhood Crypto $30M For Bending Banking Rules

NEW YORK (AP) — The crypto division of online brokerage Robinhood will pay a $30 million fine to New York State for failing to comply with regulations governing money laundering and cybersecurity, the department announced Tuesday. state financial services.

The ministry said a review of Robinhood Crypto operations from January 24, 2019 to September 30, 2019, found that the company’s compliance with banking regulations had not kept pace with its growth.

“As its business grew, Robinhood Crypto failed to invest the appropriate resources and attention to develop and maintain a culture of compliance – a failure that resulted in significant violations of the Department’s compliance regulations. anti-money laundering and cybersecurity,” Adrienne A. Harris, superintendent of the state Department of Financial Services, said in a press release.

Department of Financial Services officials said Robinhood Crypto incorrectly certified to the state that it was in compliance with transaction monitoring and cybersecurity regulations despite its shortcomings in those areas. Additionally, officials said, the company did not provide a dedicated consumer complaints phone number on its website, as required.

In addition to paying the $30 million fine, Robinhood Crypto will have to hire an independent consultant to assess the company’s regulatory compliance, officials said.

Cheryl Crumpton, Associate General Counsel of Robinhood Markets Inc., said in a statement, “We are pleased that the tentative settlement reached last year and previously disclosed in our public filings is now final. We have made significant progress in implementing industry-leading legal, compliance and cybersecurity programs, and we will continue to prioritize this work to better serve our customers.