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Robinhood Crypto Penalized $30M for Violating NY Cybersecurity Rules

By Ryan Naraine on August 03, 2022

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The cryptocurrency division of Robinhood has been slapped with a $30 million penalty by New York’s Division of Monetary Companies for important violations of cybersecurity and cash laundering rules.

The $30 million penalty, introduced late Tuesday through a consent order, provides to a litany of issues at Robinhood that vary from safety breaches, to ongoing layoffs, to an enormous crash in its public market valuation.

In keeping with a press release from the Division of Monetary Companies in New York, Robinhood Crypto “failed to take a position the right assets and a focus to develop and keep a tradition of compliance – a failure that resulted in important violations of the Division’s anti-money laundering and cybersecurity rules.” 

“The Division discovered essential failures in [Robinhood Crypto’s] cybersecurity program. This system didn’t absolutely tackle RHC’s operational dangers, and particular insurance policies inside the program weren’t in full compliance with a number of provisions of the Division’s Cybersecurity and Digital Forex Rules.”

[ READ:  Robinhood Hacked, Millions of Names, Emails Stolen ]

The division additionally outlined “important deficiencies” in Robinhood’s compliance program and transaction monitoring system, noting that they have been inadequately staffed and didn’t have adequate assets to adequately tackle dangers particular to Robinhood Crypto. 

Robinhood Crypto was additionally criticized for improperly certifying to the New York authorities that its transaction-monitoring and cybersecurity rules have been in compliance regardless of the violations and deficiencies. 

As well as, the state mentioned Robinhood Crypto didn’t publicly present a devoted telephone quantity to area complaints from clients, in violation of the principles.

Along with the $30 million penalty, the corporate may even be required, as a part of the settlement, to retain an impartial advisor for a complete analysis of Robinhood Crypto’s compliance with the rules and fixing the recognized deficiencies and violations.

In September 2021, Robinhood fessed as much as a safety breach that uncovered names and e mail addresses for thousands and thousands of customers of its inventory buying and selling platform.

Associated: Robinhood Hacked, Hundreds of thousands of Names, Emails Stolen 

Associated: Robinhood Faucets Caleb Sima to Lead Safety 

Associated: FBI Hacker Provides to Promote Knowledge Allegedly Stolen in Robinhood Breach

Associated: Inventory Buying and selling Agency Robinhood Saved Consumer Passwords in Plaintext

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