Bad news for Robinhood Mkts Rg-A on Tuesday as the New York State Department of Financial Services has fined the broker for anti-money laundering and cybersecurity violations to the tune of $30 million.
“As its business grew, Robinhood Crypto failed to invest adequate 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,” the statement said NYDFS. Superintendent Adrienne A. Harris in a statement.
In addition to the fine, Robinhood will also be required to retain an independent consultant to assess its compliance with NYDFS regulations.
According to the Wall Street Journal, the fine against Robinhood is the first crypto enforcement action by the NYDFS.
In a statement to CoinDesk, Robinhood’s Associate General Counsel for Litigation and Regulatory Compliance Cheryl Crumpton wrote: “We are pleased that the agreement in principle reached last year and previously disclosed in our public filings is now final. We have made significant progress. in building industry-leading solutions: legal, compliance, and cybersecurity programs, and we will continue to prioritize this work to better serve our clients.”
According to Robinhood’s first quarter results, cryptocurrencies made up about 25% of the company’s transaction-based revenue.
Robinhood Crypto said last year that it expected to be fined $30 million by the New York regulator. “A 2020 investigation focused primarily on issues related to cybersecurity and money laundering” and found the company to be in violation of numerous regulatory requirements, the firm said last year.
In 2021 , the trading company was fined $70 million by the Financial Industry Regulatory Authority (FINRA), the largest fine ever issued by FINRA, for failing to protect customers.