Robinhood Crypto agrees to settlement in the US over past withdrawal restrictions.
The company must now allow crypto withdrawals and update its disclosures.
The
cryptocurrency arm of the zero-free trading giant Robinhood has agreed to pay
$3.9 million to settle allegations by California's Attorney General that it
violated state commodities law by prohibiting customers from withdrawing
cryptocurrency from their accounts between 2018 and 2022.
Robinhood Crypto Settles
with California for $3.9 Million
The
settlement, announced
yesterday (Wednesday) by California Attorney General Rob Bonta, marks the
first public action by the state's Department of Justice against a
cryptocurrency company.
According
to the Attorney General's office, Robinhood sold commodities contracts in
violation of California law by allowing customers to purchase cryptocurrencies
without actually delivering the assets. During the period in question,
customers were unable to withdraw their crypto and had to sell them back to
Robinhood to exit the platform.
“Our
investigation and settlement with Robinhood should send a strong message:
Whether you're a brick-and-mortar store or a cryptocurrency company, you must
adhere to California's consumer and investor protection laws,” said Attorney
General Bonta. “I am dedicated to using all the tools available to my office to
protect California consumers in the face of advancing technology in the
marketplace.”
The
investigation also found that Robinhood misled customers about its trading
practices, including claims that it would connect to multiple trading venues to
ensure competitive prices. Additionally, the company failed to disclose
instances where it arranged for trading venues to hold customer assets for
extended periods.
Under the
terms of the settlement, Robinhood must allow customers to withdraw crypto
assets to their own wallets and update its disclosures regarding trading and
custody practices. The company did not admit or deny wrongdoing as part of the
agreement.
“We
are pleased to put this matter behind us,” added Lucas Moskowitz,
Robinhood Markets' General Counsel. “The settlement fully resolves the
Attorney General's concerns related to historical practices, and we look
forward to continuing to make crypto more accessible and affordable to
everyone.”
Robinhood Crypto’s
Additional Regulatory Problems
The
settlement comes as Robinhood faces separate scrutiny from the US Securities
and Exchange Commission (SEC), which indicated in May that it is preparing to
file suit over alleged violations of federal securities laws.
“On
May 4, 2024, Robinhood Crypto (RHC) received a 'Wells Notice' from
the Staff of the SEC stating that the Staff has advised RHC that it made a 'preliminary determination' to recommend that the SEC file an
enforcement action against RHC alleging violations of Sections 15(a) and 17A of
the Securities Exchange Act of 1934, as amended,” Robinhood mentioned in a
filing with the regulator.
The SEC's
recent measures are in line with actions taken against other cryptocurrency
exchanges like Coinbase and Binance. This reflects the heightened scrutiny that
platforms in the digital asset sector are experiencing, as well as the
persistent legal confrontations between regulatory bodies and industry
stakeholders.
The
cryptocurrency arm of the zero-free trading giant Robinhood has agreed to pay
$3.9 million to settle allegations by California's Attorney General that it
violated state commodities law by prohibiting customers from withdrawing
cryptocurrency from their accounts between 2018 and 2022.
Robinhood Crypto Settles
with California for $3.9 Million
The
settlement, announced
yesterday (Wednesday) by California Attorney General Rob Bonta, marks the
first public action by the state's Department of Justice against a
cryptocurrency company.
According
to the Attorney General's office, Robinhood sold commodities contracts in
violation of California law by allowing customers to purchase cryptocurrencies
without actually delivering the assets. During the period in question,
customers were unable to withdraw their crypto and had to sell them back to
Robinhood to exit the platform.
“Our
investigation and settlement with Robinhood should send a strong message:
Whether you're a brick-and-mortar store or a cryptocurrency company, you must
adhere to California's consumer and investor protection laws,” said Attorney
General Bonta. “I am dedicated to using all the tools available to my office to
protect California consumers in the face of advancing technology in the
marketplace.”
The
investigation also found that Robinhood misled customers about its trading
practices, including claims that it would connect to multiple trading venues to
ensure competitive prices. Additionally, the company failed to disclose
instances where it arranged for trading venues to hold customer assets for
extended periods.
Under the
terms of the settlement, Robinhood must allow customers to withdraw crypto
assets to their own wallets and update its disclosures regarding trading and
custody practices. The company did not admit or deny wrongdoing as part of the
agreement.
“We
are pleased to put this matter behind us,” added Lucas Moskowitz,
Robinhood Markets' General Counsel. “The settlement fully resolves the
Attorney General's concerns related to historical practices, and we look
forward to continuing to make crypto more accessible and affordable to
everyone.”
Robinhood Crypto’s
Additional Regulatory Problems
The
settlement comes as Robinhood faces separate scrutiny from the US Securities
and Exchange Commission (SEC), which indicated in May that it is preparing to
file suit over alleged violations of federal securities laws.
“On
May 4, 2024, Robinhood Crypto (RHC) received a 'Wells Notice' from
the Staff of the SEC stating that the Staff has advised RHC that it made a 'preliminary determination' to recommend that the SEC file an
enforcement action against RHC alleging violations of Sections 15(a) and 17A of
the Securities Exchange Act of 1934, as amended,” Robinhood mentioned in a
filing with the regulator.
The SEC's
recent measures are in line with actions taken against other cryptocurrency
exchanges like Coinbase and Binance. This reflects the heightened scrutiny that
platforms in the digital asset sector are experiencing, as well as the
persistent legal confrontations between regulatory bodies and industry
stakeholders.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
Banking Giant Bets Big on EU's First Regulated Crypto Futures Platform
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
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As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
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Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
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In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
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Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
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In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
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Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
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Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
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IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
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For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
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