In a recent statement, the New York State Department of Financial Services inflicted a fine to Robinhood Crypto. Robinhood is under investigation for a violation of the rules BSA/AML since 2021. Moreover, this is the first time that the NYDFS intervenes to condemn a cryptographic entity.
Robinhood violated anti-money laundering and cybersecurity regulations.
In a press release announcing the fine, the regulator noted that its investigation found that Robinhood Crypto failed to comply with the Banking Secrecy and Anti-Money Laundering Act (BSA/AML). The platform also violated key consumer and reporting requirements, the memo said.
According to Superintendent Adrienne Harris of the NYDFSthe penalty is for “significant anti-money laundering, cybersecurity and consumer protection violations”. Moreover, inoted that these requirements apply to all New York State financial services providers. It indeed applies to all virtual currency providers and all traditional businesses.
“As his business grew, Robinhood Crypto has not invested the appropriate resources and attention to develop and maintain a culture of compliance. DFS will continue to investigate and take action when a licensee violates the law or Department regulations, which are essential to protect consumers and keep institutions safe and sound. »Harris said.
As part of the settlement with NYDFS, Robinhood must get the services of an independent consultant who, among other things, will ensure compliance and carry out remedial work.
Bonus : Huobi receives regulatory approval to operate in Australia.
Focus on the crypto branch of Robinhood
For a reminder, Robinhood last raised $3.4 billion in early 2021. Sequoia Capital and Andreessen Horowitz participated in the financing. She made her public debut at Nasdaq in July 2021. As the space exploded, the trading app got more involved in crypto, eventually launching a dedicated digital asset division called Robinhood Crypto.
However, it suffered a months-long downturn in 2022. Son turnover fell by almost 50% in the first quarter of this year, and it has since joined a growing number of tech companies announcing layoffs.
The exchange first disclosed a settlement with regulators in 2021. It featured a modest $10 fine that later rose to $30 million. As a reminder, the company was also sentenced to a fine of 70 million dollars by the Financial Industry Regulatory Authority (FINRA) the United States. This for a systemic problem that has exposed consumers to financial loss.
On trend: SEC Charges 11 People with Alleged ‘Forsage’ Crypto Ponzi Scheme
