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Robinhood’s (NASDAQ:HOOD) cryptocurrency division has been fined $30 million by the New York State Department of Financial Services, it was revealed Tuesday.
The fine comes after the brokerage was accused of significant anti-money laundering, cybersecurity and consumer protection violations.
The regulator said they found Robinhood Crypto’s anti-money laundering and cybersecurity program had significant deficiencies, such as being inadequately staffed and not having sufficient resources to adequately address risks specific to Robinhood Crypto.
“As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance—a failure that resulted in significant violations of the Department’s anti-money laundering and cybersecurity regulations,” said DFS Superintendent Harris. “All virtual currency companies licensed in New York State are subject to the same anti-money laundering, consumer protection, and cybersecurity regulations as traditional financial services companies.”
Robinhood Crypto is also said to have failed to comply with consumer protection requirements by not maintaining a dedicated phone number on its website for consumer complaints.
As well as the $30 million penalty, Robinhood Crypto will have to retain an independent consultant that will perform an evaluation of its compliance with regulations.
Robinhood shares are little moved Tuesday, down just 0.06%.
