Crypto Arm of Robinhood Fined US$30 Million For Compliance Failures
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According to NYDFS Superintendent Adrienne A. Harris, as its business expanded, Robinhood Crypto failed to invest the necessary resources and attention to develop and maintain a culture of compliance, resulting in significant violations of the Department's anti-money laundering and cybersecurity regulations.
Robinhood Lacks Workforce
Knowing what was coming, Robinhood Crypto indicated last year that it anticipated paying the NYDFS US$30 million. The NYDFS inquiry discovered that Robinhood lacks the workforce and resources necessary to maintain regulatory compliance. It took too long for the company to move away from a manual transaction monitoring system that was inadequate for its size. Robinhood also didn't devote enough resources to addressing the risks unique to the business.
Robinhood was fined US$70 million in 2021 by the Financial Industry Regulatory Authority (FINRA) for providing false information and failing to shield customers from interruptions. They also warned Robinhood for not giving customers a specific phone number to call with complaints. In New York, the price of Robinhood shares rose 2.1 percent to US$9.23 due to the announcement and the uncertainty about the fine.