Robinhood Crypto fined $30 million for alleged regulatory violations in NY

Illustration by Alex Castro / The Verge

According to The Wall Street Journal, the New York Department of Financial Services imposed a $30 million fine on the company. This is the state's first enforcement action relating to cryptocurrencies.

The investigation opened by the NYDFS last March was resolved by the settlement. The company originally estimated that the NYDFS would fine it up to 15 million dollars, but later changed its filing to reflect an estimated 30 million dollars.

Critical failures that did not fully address the company's operational risks were reported by the NYDFS. The NYDFS alleges that Robinhood violated consumer protection laws by not having a phone number for customer complaints on its website.

The NYDFS said that as its business grew, it failed to invest the proper resources and attention to develop and maintain a culture of compliance.

The associate general counsel of litigation and regulatory enforcement said that the settlement in principle reached last year is now final. We have made significant progress building legal, compliance, and cybersecurity programs, and will continue to prioritize this work to best serve our customers.

$65 million was charged by the SEC for misrepresenting how it makes money. In June of last year, the Financial Industry Regulatory Authority fined the company over its failure to protect customers. The US Department of Justice seized the phone of the CEO of Robinhood during its investigation into how the company handled the stock craze.