Robinhood exchange faces charges from the New York State Department of Financial Services because it fails to maintain the AML measures fully.
Robinhood is a US-based popular crypto exchange and exchange is known as a rival of Coinbase exchange. Robinhood was founded in 2013 as a stock brokerage platform but later in 2015 introduced crypto trading via its mobile app. In 2021, the Robinhood exchange started to expand its crypto offerings and also added many new crypto assets this year, to allow a huge range of crypto assets trading for customers.
On 2 August, The Wall Street Journal reported that the New York State Department of Financial Services (NYDFS) imposed a fine of $30 million on the crypto subsidiary of Robinhood Markets Inc.
The reason behind these charges against Robinhood was its failure to follow all anti-money Laundering & cybersecurity measures properly.
Besides this $30 million penalty, Robinhood will be forced to hire an outside consultant, who can deeply analyze and figure out all measures followed by the company, in order to follow the regulatory guidelines properly.
According to the report, a supervisory exam and a subsequent enforcement inquiry in the crypto offerings infrastructure of Robinhood noted severe flaws.
Cheryl Crumpton, Associate General Counsel of Litigation and Regulatory Enforcement of Robinhood, responded on this matter officially and said that Robinhood will take these orders as a priority to ensure better customer experiences.
“We have made significant progress building industry-leading legal, compliance, and cybersecurity programs, and will continue to prioritize this work to best serve our customers.”
Earlier in 2020, an investigation against Robinhood exchange found that the exchange failed to comply with many regulatory standards. That Investigation & exam was also to test the degree of measures followed by Robinhood. So, In 2021, Robinhood was fined by the regulatory body of New York.