The New York State Department of Financial Services (DFS) has fined Robinhood Crypto $30 million for “significant failures in the areas of bank secrecy act/anti-money laundering (‘BSA/AML’) obligations and cybersecurity.”
Robinhood Crypto Settles With the DFS
The New York State Department of Financial Services (DFS) announced Tuesday that Robinhood Crypto LLC (RHC) will pay a $30 million penalty to New York State for “significant failures in the areas of bank secrecy act/anti-money laundering (‘BSA/AML’) obligations and cybersecurity.”
The failures resulted in violations of the department’s Virtual Currency Regulation, Money Transmitter Regulation, Transaction Monitoring Regulation, and Cybersecurity Regulation, the DFS detailed.
Superintendent of Financial Services Adrienne A. Harris commented:
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.
“All of these deficiencies resulted from what the Department found were significant shortcomings in the management and oversight of RHC’s compliance programs, including a failure to foster and maintain an adequate culture of compliance,” the announcement continues.
Besides the $30 million penalty, Robinhood Crypto will be required to retain an independent consultant that will perform a comprehensive evaluation of its compliance with the DFS regulations.
The New York State regulator approved Robinhood Crypto’s applications for a virtual currency license and a money transmission license in January 2019, stating at the time:
DFS has authorized Robinhood Crypto to offer services for buying, selling, and storing seven virtual currencies, including bitcoin, ether, bitcoin cash, and litecoin.
Robinhood offers commission-free crypto investing. The platform currently supports the buying, selling, and real-time market data for bitcoin (BTC), bitcoin cash (BCH), bitcoin sv (BSV), chainlink (LINK), compound (COMP), dogecoin (DOGE), ethereum (ETH), ethereum classic (ETC), litecoin (LTC), polygon (MATIC), shiba inu (SHIB), solana (SOL), and uniswap (UNI).
What do you think about the DFS taking action against Robinhood Crypto? Let us know in the comments section below.
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Author: Kevin Helms