The New York Department of Financial Services (DFS) has determined that Robinhood Crypto failed to maintain effective bank secrecy act (BSA) and anti-money laundering (AML) compliance in regards to reporting requirements.
Adrienne A. Harris, Superintendent of Financial Services, said Robinhood Crypto will pay a $30 million penalty to New York State for significant failures that resulted in violations of the Department’s Virtual Currency Regulation, Money Transmitter Regulation, Transaction Monitoring Regulation, and Cybersecurity Regulation. Robinhood has agreed to the settlement.
In addition to the penalty, Robinhood will also be required to retain an independent consultant that will perform a comprehensive evaluation of its compliance with the Department’s Regulations and remediation efforts.
Harris issued the following statement:
“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. 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. DFS will continue to investigate and take action when any licensee violates the law or the Department’s regulations, which are critical to protecting consumers and ensuring the safety and soundness of the institutions.”
DFS claims that Robinhood Crypto is inadequately staffed, failed to transition from a manual to automated monitoring service and did not devote sufficient resources to address aforemented risks.
DFS added that Robinhood Crypto improperly certified compliance with the Department’s Transaction Monitoring Regulation and Cybersecurity Regulation.