Robinhood Crypto has been given a $30m penalty by the New York Department of Financial Services for violations of cyber and money laundering regulations.
According to Security Week, the penalty adds to a litany of problems at Robinhood that range from security breaches to ongoing layoffs and a massive crash in its public market valuation.
The New York Department said that 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’.
The Department said it found critical failures in the division’s cybersecurity program, with the program not fully addressing RHC’s operational risks, while specific policies within the program were not in full compliance with several provisions of the Department’s Cybersecurity and Virtual Currency Regulations.”
Furthermore, the Department outlined ‘significant deficiencies’ in Robinhood’s compliance program and transaction monitoring system, noting they were inadequately staffed and did not have sufficient resources to address risks specific to Robinhood Crypto.
Robinhood Crypto was additionally criticised for improperly certifying to the New York authorities that its transaction-monitoring and cybersecurity regulations were in compliance despite the violations and deficiencies.
New York State said Robinhood Crypto did not publicly provide a dedicated phone number to field complaints from customers, in violation of the rules.
Alongside the penalty, the firm will be required as part of the settlement to retain an independent consultant for an evaluation of Robinhood Crypto’s compliance with the regulations and fixing the identified deficiencies and violations.
Copyright © 2022 FinTech Global
