Robinhood Fined $30 Million by NYDFS Over Non-compliance

• Robinhood reportedly failed to meet some consumer-protection criteria.
• The SEC fined a $65 million payment from the business in December 2020.

Anti-money laundering and cybersecurity standards were reportedly violated by Robinhood’s crypto trading business, which has been fined $30 million by the New York State Department of Financial Services.

“Insufficient staffed” and “failed to transition in a timely manner” from a manual transaction monitoring system that was suitable for the company’s size, transaction volumes, and client profiles were found by the New York Department of Financial Services (NYDFS).

Not the First Time by Robinhood

As reported by NYDFS, Robinhood’s cybersecurity program failed to manage operational risks and its policies did not comply with regulatory requirements on cybersecurity and virtual currency. Additionally, Robinhood reportedly failed to meet some consumer-protection criteria by failing to provide a phone number on its website to collect customer complaints.

On top of that, an “enforcement investigation” into the online brokerage company found severe flaws, according to the WSJ report. Oversight of compliance programs by the company’s management is said to be the cause of the shortcomings.

The regulator has now taken its first enforcement action relating to cryptocurrency by issuing this punishment. Adrienne A. Harris, its new superintendent, has said that she hopes to provide the crypto business greater direction with this announcement. In addition, she plans to enlarge the regulator’s virtual currency division.

Apparently, this isn’t the first time Robinhood has flouted the rules of the game. As part of the settlement, the SEC received a $65 million payment from the business in December 2020. And in June of last year, the Financial Industry Regulatory Authority penalized the brokerage business for $70 million for failing to safeguard consumers.

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