On Tuesday, the New York Department of Financial Services (NYDFS) fined the crypto branch of trading app Robinhood US$30 million for allegedly breaking the bank secrecy act, anti-money laundering, and cybersecurity standards.
In addition, the financial regulator requested that the firm hire an independent consultant to ensure compliance with NYDFS laws.
NYDFS Superintendent Adrienne A. Harris said,
“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.”
Robinhood crypto anticipated the fine and stated last year that it expected to pay the NYDFS $30 million.
The NYDFS inquiry discovered that Robinhood crypto lacks resources, including staff, to ensure regulatory compliance.
The Financial Industry Regulatory Authority (FINRA) fined Robinhood $70 million in 2021 for providing deceptive information and failing to protect users from outages.
On the news, Robinhood stock closed up 2.1 percent at US$9.23 in New York, as the concern about the penalties subsided.