Robinhood’s crypto division has settled an investigation into its past practices of not allowing customers to withdraw their crypto from 2018 to 2022, with a $3.9 million fine.
at name The California Department of Justice announced Wednesday that Attorney General Rob Bonta has secured a $3.9 million settlement with Robinhood Crypto, which the investigation found resulted in customers being unable to withdraw their cryptocurrencies and having to sell them back to Robinhood in order to exit the trading platform.
The California Department of Justice said, “Robinhood misled customers by advertising that it would connect customers to multiple exchanges to ensure they received the most competitive prices across exchanges, which was not always true.”
“The investigation and settlement with Robinhood should send a strong message: Whether you’re a brick-and-mortar store or a cryptocurrency company, you must comply with California’s consumer and investor protection laws,” Bonta said.
As part of the settlement, Robinhood must allow customers to withdraw their crypto assets from Robinhood and transfer them to their wallets. It must also clearly inform users that the platform holds cryptocurrencies and may delay settlement with exchanges “in the event of an incident that raises concerns about the network security of crypto assets.”
Lucas Moskovitz, Robinhood’s general counsel, emailed a statement to The Block saying the company was “pleased to put this matter behind us.”
“This settlement fully addresses the attorney general’s concerns regarding historical practices, and we will continue to work to make cryptocurrencies more accessible and affordable for everyone,” Moskovitz said.
Shares of Nasdaq-listed Robinhood closed down 1.34% at $19.11 on Wednesday.
Robinhood appears to be investing heavily in cryptocurrency trading. In June, Robinhood announced that it would be investing heavily in cryptocurrency trading. Cryptocurrency exchange Bitstamp acquired. that The transaction is expected to close in the first half of 2025.
Robinhood’s cryptocurrency trading-based revenue for the second quarter of this year Expanded to $81 millionA 161% increase over the previous year. That number. Double up The company’s stock trading income during the quarter.
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