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Robinhood’s crypto unit fined $ 30 million

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HIGHLIGHTS :

  • Robinhood is accused of violating anti-money laundering regulations
  • The firm says it has strengthened compliance and cyber security
  • Robinhood has faced scrutiny before

Earlier this year Robinhood reported a non-custodial offering. This will give customers complete control over their crypto assets in Web 3

Robinhood is accused of violating anti-money laundering regulations

The crypto unit of trading platform Robinhood has been fined $30 million in the US for violating regulations. Robinhood is accused of violating anti-money laundering, cyber security, and consumer protection regulations. The New York Department of Financial Services (NYDFS) reported that the firm’s crypto unit did not deploy sufficient resources to address compliance and cybersecurity risks. The firm is facing several regulatory scrutinies.

In this regard, Cheryl Crumpton, Associate General Counsel of the firm, said that Robinhood has strengthened its legal, compliance, and cyber security programs. Earlier this year Robinhood reported a non-custodial offering. This will give customers complete control over their crypto assets in Web 3. It will be launched as a separate app. Customers will have keys to their crypto assets and will be able to access decentralized apps (dApps) for trading. No network fee will be required for this.

The firm says it has strengthened compliance and cyber security

Robinhood recently signed a deal to acquire UK-based fintech app Ziglu. Ziglu allows users to buy and sell 11 cryptocurrencies as well as make payments abroad. This is Robinhood’s second attempt to expand business in the UK. About two years ago, it shelved its plans for expansion in the UK market.

Robinhood has faced scrutiny before

In this regard, the firm said, “We have signed a deal to acquire UK-based crypto firm Ziglu as part of our plans to expand overseas.” This will not change anything for Ziglu customers in the short term. However, later the firm will be integrated with Robinhood. Along with this, work will be done on expanding business in Europe outside the UK. Robinhood CEO Vladimir Tenev recently described Dogecoin as an important cryptocurrency. However, at the same time, he said that the transaction fees associated with Dogecoin need to be significantly reduced. Tenev believes that making some changes to Dogecoin can significantly increase its use.

Robinhood Crypto will have to retain an independent consultant-

to evaluate its compliance with related regulations.

“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,” said NYDFS Superintendent Adrienne Harris.

“We are pleased the settlement in principle reached last year and previously disclosed in our public filings is now final,” said Cheryl Crumpton, associate general counsel of litigation and regulatory enforcement at Robinhood.

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

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