The department further accused Robinhood of misleading customers by claiming it would connect them to multiple trading venues for the best price. At times, however, Robinhood arranged for third-party venues to hold customer assets, even while representing that it held all customer cryptocurrencies.
Settlement Terms: Improved Transparency and Customer Protections
As part of the $3.9 million settlement, Robinhood, while not admitting or denying any wrongdoing, must allow customers to withdraw their cryptocurrency assets to their personal wallets. The company is also required to ensure its written policies align with its trading and order handling practices.
Additionally, Robinhood must clearly disclose its role as custodian of customer assets and update its Customer Agreement to notify users of any potential delays in transaction settlement. Should any incident delay a transaction for more than a week, Robinhood is required to inform the attorney general’s office.
Robinhood $3.9M Deal : Ongoing Legal Challenges and Business Moves
This $3.9 million deal marks the latest in a series of legal settlements for Robinhood. In July, the company received final approval for a $9 million settlement in Washington state to resolve claims that its referral program violated the Commercial Electronic Mail Act by sending unsolicited promotional texts to nonusers.
