Robinhood fined $30 million

Already in the confusion, Robinhood is fined $30 million. A very difficult period for a brokerage firm.

Robinhood is having a hard time, and a $30 million fine from the New York State Department of Financial Services will certainly not help her. This is the first crypto-centric action taken by a US regulator. Robinhood would not comply with current anti-money laundering and cyber security regulations. In a statement, the Department of Financial Services explains that after the audit, it found several weaknesses in the company.

Already in the turmoil, Robinhood is fined $30 million.

Apparently, Robinhood lacks employees involved in the anti-money laundering program. The company would also not be able to abandon the system of manual monitoring, which is no longer enough today. In addition, the department found that the guidelines in place under the Robinhood cybersecurity program are not fully compatible with official cybersecurity and virtual currency regulations.

The New York regulator also mentioned that Robinhood was unable to properly validate its full compliance with the Department’s Transaction Monitoring Regulations and Cyber ​​Security Regulations. Thus, Robinhood was breaking the law. Finally, the regulator states that Robinhood has failed to do what is necessary to protect users by not maintaining a dedicated phone number (and posting it on its website) for complaints from those same users.

A very difficult period for a brokerage firm

In addition to being required to pay $30 million, Robinhood will have to engage an independent consultant to assess whether appropriate action has been taken to manage these various locations.

Robinhood recently announced that it is parting ways with 23% of its payroll due to inflation and the collapse of the cryptocurrency market. This is the company’s second wave of layoffs this year, and it will affect all divisions. The decision comes after the release of its financial results for the second quarter of 2022 with a net loss of $295 million and a loss of 1.9 million monthly active users.