Robinhood Being Forced To Pay Massive Fine For Previous Ban
The fine announced on Wednesday was determined based on various restrictions imposed by Robinhood between 2018 and 2022, during which the platform did not allow users to withdraw their purchased cryptocurrencies. The company is now expected to demonstrate genuine transparency and ensure that customers have control over their cryptocurrencies.
An Ongoing Investigation
The investigation by California regulators classified the traded cryptocurrencies on Robinhood as commodities. It discovered that Robinhood Crypto allowed customers to purchase digital assets but did not provide them with custody, violating state regulations.
Attorney General Rob Bonta stated that the ongoing investigation and resolution with Robinhood should convey a clear message, which is that whether anyone operates a physical store or a cryptocurrency business, compliance with local consumer and investor protection laws is absolutely mandatory.
Revising Crypto Practices
Despite Robinhood Crypto lifting the withdrawal ban last year, the company is now held accountable for past actions. As part of the settlement, Robinhood must ensure that customers can withdraw their cryptocurrencies and update its information regarding asset custody.
Robinhood has also disclosed receiving subpoenas by the California Attorney General related to its business practices, trading operations, and asset custody. The settlement includes an independent review by the SEC to examine possible breaches of federal securities laws, without Robinhood admitting to any wrongdoing.
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