Superintendent Adrienne Harris stated, “As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance.”

The cryptocurrency division of Robinhood has been fined $30 million by the New York Department of Financial Services (NYDFS) for allegedly breaking consumer protection, cybersecurity, and anti-money laundering laws.

Robinhood Crypto will pay a $30 million fine to the state, according to a statement made on Tuesday by NYDFS Superintendent Adrienne Harris, for “significant failures in the areas of bank secrecy act/anti-money laundering obligations” as well as cybersecurity failures that allegedly broke New York laws. Harris claims that Robinhood’s cryptocurrency division will also be required to hire a third-party consultant to assess the company’s compliance and corrective action efforts.

According to Harris, “Robinhood Crypto failed to devote the necessary time and resources to creating and sustaining a culture of compliance as its business grew.” “The same anti-money laundering, consumer protection, and cybersecurity regulations that apply to traditional financial services companies apply to all virtual currency companies licensed in New York State.”

#ICYMI: DFS Superintendent Harris Announces $30 Million Penalty on Robinhood Crypto for Significant Anti- Money Laundering, Cybersecurity & Consumer Protection Violations. Read more: https://t.co/TUD2SwmOcw

— NYDFS (@NYDFS) August 2, 2022

In accordance with the terms of the consent agreement, the NYDFS claimed that between January and September 2019 it had “found serious deficiencies in RHC’s compliance function across multiple areas.” After determining that certain BSA and AML regulations had been broken by Robinhood’s cryptocurrency division, the NYDFS launched an enforcement investigation.

Allegations that Robinhood Crypto violated these rules included not switching to a sufficiently large transaction monitoring system or “devoting sufficient resources to adequately address risks.” In addition, according to the financial regulator, Robinhood violated a supervisory agreement by failing “to maintain on its website a telephone number for the receipt of customer complaints.”

Associate general counsel for litigation and enforcement of regulations at Robinhood According to Cheryl Crumpton, the company and the NYDFS reached a preliminary agreement in 2021 and disclosed it in its public filings. Robinhood made “significant progress building industry-leading legal, compliance, and cybersecurity programs,” according to Crumpton.

The U.S. Financial Industry Regulatory Authority fined Robinhood about $70 million in June 2021 for allegedly harming thousands of users “widespread and significantly” and displaying “systemic supervisory failures” beginning in September 2016. Shares of HOOD were trading at $9 at the time of publication, down about 0.3 percent over the previous 24 hours.