NEW YORK CITY, New York: The Department of Financial Services of New York State said it has fined the crypto division of the online brokerage, Robinhood, $30 million for not complying with regulations governing money laundering and cybersecurity.
An investigation into Robinhood Crypto's operations from 24th January, 2019 to 30th September, 2019 found that the company had not been in compliance with banking regulations, the department added.
In a news release, Adrienne A. Harris, superintendent of the department, said, "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."
According to officials from the department, Robinhood Crypto improperly certified to the state that despite its deficiencies in those areas, it was complying with transaction-monitoring and cybersecurity regulations.
But the company failed to provide a dedicated phone number for consumer complaints on its website, as required, they added, stressing that besides the $30 million penalty, Robinhood must hire an independent consultant who will evaluate its regulatory compliance.
In a statement, Cheryl Crumpton, associate general counsel for Robinhood Markets Inc., said, "We are pleased the settlement, in principle, reached last year and previously disclosed in our public filings, is now final. We have made significant progress building industry-leading legal compliance and cybersecurity programs, and will continue to prioritize this work to best serve our customers."