The New York State Department of Financial Services (NYDFS), in its first crypto industry investigation, accused Robinhood Crypto of violating anti-money laundering and user protection regulations.
The regulator has announced that Robinhood Crypto does not endorse or certify anti-money laundering or cyber security programs. The regulator has ordered Robinhood to hire an independent consultant to assess compliance with NYDFS rules and remedial efforts.
The department clarified that it found serious deficiencies during the audit and subsequent investigation of Robinhood. The failures during the certification exam were due to shortcomings in company management and oversight of compliance programs, the regulator said.
In particular, we are talking about the inability to develop and maintain a culture of compliance, to allocate adequate resources to programs due to the rapid growth of the company. The NYDFS believes that Robinhood failed to comply with bank secrecy and anti-money laundering requirements.
The company was understaffed and unable to timely transition from a manual transaction monitoring system that was appropriate for the company’s size, transaction volumes, and customer profiles. According to NYDFS specialists, Robinhood’s cybersecurity program failed to eliminate operational risks, and the company’s policy did not comply with the regulator’s rules in the field of digital asset security.
Robinhood Deputy General Counsel for Litigation and Compliance Cheryl Crumpton says the company has made significant progress in building industry-leading legal and cybersecurity programs.
In April, the New York Senate changed legislation so that the State Department of Financial Services (NYDFS) has the right to collect money to control crypto companies from the companies themselves.
Source: Bits
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