Tuesday, April 16, 2024
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Within the newest in what appears to be a string of challenges the corporate has to grapple with, Robinhood’s crypto division has been slapped with a $30 million wonderful by the New York State Division of Monetary Companies. It is the primary crypto-focused enforcement motion by the regulator, which has issued the multimillion greenback penalty in opposition to Robinhood for what it says are violations in opposition to the state’s anti-money laundering and cybersecurity rules. In its announcement, the Monetary Companies Division stated it discovered important deficiencies within the firm’s compliance packages following a supervisory examination.

Apparently, there weren’t sufficient individuals working in Robinhood’s cash laundering compliance program. The corporate additionally didn’t transition from a guide monitoring system, which is now not adequate now that it is a lot bigger than when it began. As well as, the division discovered that insurance policies inside Robinhood’s cybersecurity program aren’t in full compliance with official cybersecurity and digital forex rules. 

The New York regulator additionally talked about that Robinhood improperly licensed compliance with the Division’s Transaction Monitoring Regulation and Cybersecurity Regulation. Because it wasn’t totally compliant with the state’s cybersecurity guidelines, Robinhood violated the regulation by claiming compliance. Lastly, the regulator stated Robinhood failed to stick to shopper safety necessities by not sustaining a separate telephone quantity (and displaying it on its web site) particularly for shopper complaints. 

Superintendent of Monetary Companies, Adrienne A. Harris, stated in an announcement:

“As its enterprise grew, Robinhood Crypto failed to take a position the right assets and a focus to develop and keep a tradition of compliance—a failure that resulted in important violations of the Division’s anti-money laundering and cybersecurity rules. All digital forex corporations licensed in New York State are topic to the identical anti-money laundering, shopper safety, and cybersecurity rules as conventional monetary companies corporations. DFS will proceed to analyze and take motion when any licensee violates the regulation or the Division’s rules, that are vital to defending customers and guaranteeing the security and soundness of the establishments.”

Except for having to pay $30 million, Robinhood should retain an unbiased advisor who will consider if it has taken the suitable actions to handle its violations and deficiencies beneath the settlement.

Robinhood additionally lately introduced that it is shedding 23 % of its workforce because of file inflation and the cryptocurrency crash. It is the corporate’s second spherical of job cuts this 12 months and can have an effect on workers throughout divisions. That revelation got here after Robinhood revealed its earnings for the second quarter of 2022, whereby it posted a web lack of $295 million and introduced a lower of 1.9 million in month-to-month energetic customers. 

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