Robinhood Agrees to $3.9 Million Settlement Over Crypto Practices
Robinhood, the popular cryptocurrency trading platform, has settled with regulators for up to $3.9 million following customer complaints about its crypto operations. The settlement also imposes stricter conduct regulations on the company.
The probe into Robinhood was sparked by user complaints about issues with accessing cryptocurrency holdings between 2018 and 2022 and inadequate disclosure of trading practices.
California Attorney General Rob Bonta announced that Robinhood violated the California Commodities Law by selling commodities contracts and failing to deliver the promised assets. Customers were often unable to access their investments and were forced to sell their crypto back to the platform.
Bonta’s press release highlighted that Robinhood misled customers about its trading practices and asset custody, leading to the current penalties. The settlement also includes new conduct requirements for Robinhood.
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In addition to this settlement, Robinhood is under scrutiny by the US Securities and Exchange Commission (SEC), which has issued a Wells Notice indicating potential enforcement actions. Despite these legal challenges, Robinhood has shown strong financial performance, with a 40% increase in Q2 revenues to $682 million, largely driven by crypto and options trading.
The company has also expanded through strategic acquisitions, including the purchase of European crypto exchange Bitstamp and AI-powered investment research platform Pluto Capital. These moves are aimed at driving future growth.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
