Robinhood’s cryptocurrency trading platform has agreed to pay a $3.9 million penalty to resolve allegations brought by the state of California that the company restricted customer withdrawals from their accounts between 2018 and 2022, California Attorney General Rob Bonta announced Wednesday.
This civil settlement is the first public enforcement action by the California Department of Justice (DOJ) against a cryptocurrency company. The investigation focused on whether Robinhood Crypto LLC violated the California Commodities Law (CCL).
Robinhood $3.9M Deal : California’s First Major Crypto Enforcement
“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,” Bonta said in a statement.
Lucas Moskowitz, Robinhood’s general counsel, said the company was “pleased to put this matter behind us.” He added that the settlement fully addresses the Attorney General’s concerns, and Robinhood looks forward to continuing its mission of making cryptocurrency more accessible to everyone.
Alleged Violations of Withdrawal Rights
According to the DOJ’s findings, Robinhood violated the CCL by allowing customers to purchase cryptocurrencies, such as Bitcoin, without properly delivering the assets to them. Customers were also unable to withdraw their digital currencies and were required to sell them back to Robinhood in order to exit the platform, the investigation revealed.
