Robinhood fined $30 million for violating New York's virtual currency regulations
Robinhood's cryptocurrency division has been fined $30 million by the New York State Department of Financial Services, according to a report. It's the first crypto-specific enforcement measure taken by the department, which levied a multimillion-dollar penalty against Robinhood for what it called infractions to state anti-money laundering and cybersecurity standards. Following a supervisory examination, the Financial Services Department revealed numerous problems with the business's compliance strategies.
Robinhood apparently didn't have enough people working in its money laundering compliance program. The firm also failed to move from a manual monitoring system, which is no longer sufficient when the business is larger than it was when it began. In addition, the department discovered that Robinhood's cybersecurity policy isn't completely compliant with official cybersecurity and virtual currency laws.
The New York Department of Financial Services has alleged that Robinhood violated the state's Cybersecurity Regulation and Transaction Monitoring Regulation. Because it was not fully compliant with the state's cybersecurity standards, Robinhood broke the law by stating its compliance. Finally, according to the regulator, Robinhood flouted consumer protection laws by failing to maintain a separate phone number (and displaying it on its website) exclusively for consumer complaints.
Aside from paying $30 million, Robinhood must hire an independent consultant to evaluate if it has implemented the required measures to correct its shortcomings and breaches as a result of the settlement.
The firm just announced that it would be reducing its staff by 23% as a result of record inflation and the cryptocurrency recession. It's the second time this year that Robinhood has cut jobs, affecting workers across divisions. After Robinhood released its second-quarter earnings, revealing a net loss of $295 million while announcing a reduction in monthly active users of 1.9 million, it revealed that it would be laying off 23 percent of its employees due to record inflation and the cryptocurrency crash.
Source: www.engadget.com
