Robinhood’s Crypto Division Is Fined $30 Million By New York Regulators

People wait in line to buy t-shirts at a Robinhood online brokerage pop-up kiosk along Wall Street after the company’s initial public offering on July 29, 2021 in the city. New York City.

Spencer Platt | beautiful pictures

New York State Department of Financial Services announced on Tuesday, it issued a $30 million penalty against Robin Hood heroelectronic money division.

The NYDFS, the government arm responsible for regulating financial products and services, alleges that Robinhood Crypto’s cybersecurity and anti-money laundering program is under-staffed and under-resourced to deal with it. risk. It also alleges Robinhood’s crypto division failed to promptly transition from a manual transaction monitoring system to one that is more suitable for user size and trading volume.

The $30 million penalty is NYDFS’s first ever crypto sector enforcement. Robinhood said last year that it expected to pay a $30 million payment to the NYDFS following a 2020 investigation focused on issues related to anti-money laundering and cybersecurity.

The regulator claimed Robinhood Crypto broke the law when, despite the alleged problems, it certified the department’s compliance. Robinhood Crypto is also accused of violating consumer protection requirements by not maintaining a separate and dedicated phone number on its website for consumer complaints.

Robinhood Crypto will have to keep an independent consultant to assess its compliance with relevant regulations.

“As its business grew, Robinhood Crypto failed to invest the proper resources and attention in developing and maintaining a culture of compliance – a failure that resulted in a serious breach of regulatory compliance. Department of Anti-Money Laundering and Cybersecurity,” said NYDFS Director Adrienne Harris.

The fine is the latest in a series of monetary penalties that regulators have imposed against Robinhood. In 2020, Robinhood paid $65 million for settle an SEC probe excessively misleading customers. In 2021, the Financial Industry Regulatory Authority (FINRA) $70 million Robinhood fine to cause problems and mislead customers.

Cheryl Crumpton, deputy general counsel for litigation and enforcement at Robinhood, said: “We are pleased by the agreement in principle reached last year and the previous disclosure in the public records of the company. We are the last.”

Crumpton added that the company has made “significant progress” in building its legal, compliance and cybersecurity programs.

Source link


News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button