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Robinhood’s Crypto Arm Faces A Penalty Of $30 Million

The New York Department of Financial Services (NYDFS) has declared a fine of up to $30M for the crypto division of Robinhood for reported infringement of the consumer protection, cybersecurity, and anti-money laundering laws. In a declaration on Tuesday, Adrienne Harris – the regulatory agency’s superintendent – stated that a $30M fine will be paid by Robinhood Crypto to the state over significant failures related to the areas of cybersecurity, anti-money laundering, as well as the bank secrecy act, infringing the regulations implemented in New York.

New York’s Financial Watchdog Hits Robinhood with $30M Penalty

As per Harris, another thing required from the crypto unit of Robinhood will be the appointment of an autonomous consultant who will assess the remediation as well as the compliance endeavors of the company. Harris added that with the growth in the firm’s business, it remained ineffective to invest in adequate resources as well as concentrate on the development as well as maintenance of the compliance culture.

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In her words, the entirety of the firms dealing with virtual currencies under the authorization of New York State is liable to fulfill the same cybersecurity, consumer protection, and anti-money laundering regulations just like the conventional services firms. As put by the consent order of NYDFS, the department organized an analysis of Robinhood from January to September 2019, accusing that some severe deficiencies have been found by it in the compliance operations of RHC throughout many areas.

Robinhood Remains in a Constant Observation of Regulators

Then the NYDFS started an investigation, discovering that the crypto unit of Robinhood did not meet the regulatory requirements in the above-mentioned areas. Among the infringements, some accusations were also included as the platform did not incorporate an appropriate system for transaction monitoring, neither it specified adequate resources to cope with the risks.

Apart from that, the financial watchdog accused that the venue remained unsuccessful in providing a telephone number on its online portal to receive complaints from the consumers, as was mentioned in a supervisory contract. In June this year, Robinhood was penalized nearly $70M by the Financial Industry Regulatory Authority of the United States for supposedly causing substantial and wide-ranged damage to numerous customers as well as experiencing failures related to systematic supervisory.

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Mubashar Nawaz (United Arab Emirates)

Mubashar Nawaz is an experienced crypto writer working for Tokenhell. Having passion for writing, he covers news articles from blockchain to cryptocurrency.

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