Robinhood’s Crypto Unit Fined $30 Million by New York’s Top Financial Regulator
The New York State Department of Financial Services imposed a $30 million fine on the cryptocurrency trading unit of online brokerage Robinhood Markets Inc. for alleged violations of anti-money-laundering and cybersecurity regulations, in the department’s first crypto enforcement action. The New York State financial regulator said Tuesday that Robinhood Crypto LLC failed to maintain and certify compliant anti-money-laundering and cybersecurity programs. As part of the consent order, Robinhood also will be required to retain an independent consultant to evaluate its compliance with NYDFS’s regulations and its remediation efforts. NYDFS said it found significant failures through a supervisory exam and through a subsequent enforcement investigation of Robinhood. The failures, the regulator said, resulted from shortcomings in the company’s management and oversight of its compliance programs. These include failures to foster and maintain a culture of compliance and to allocate adequate resources to the programs, particularly as the company grew quickly, which exacerbated the issues.