Robinhood Settles with California for Violating Crypto Custody Law
CryptoNewsTerminal Staff05 Sep, 2024
Robinhood Settles with California for Violating Crypto Custody Law
Robinhood to Pay $3.9 Million Settlement Popular mobile trading platform Robinhood has agreed to pay $3.9 million to settle allegations that it violated California's cryptocurrency custody law. The California Department of Financial Protection and Innovation (DFPI) alleged that Robinhood sold cryptocurrencies to its customers as commodities but prevented them from withdrawing the digital assets they purchased. This was deemed a violation of the state's commodities law. As part of the settlement, Robinhood has agreed to update its cryptocurrency custody policies to comply with California law. The company will also pay a $2.5 million civil penalty and $1.4 million in restitution to affected customers. The DFPI's action highlights the increasing regulatory scrutiny of cryptocurrency trading platforms. Other states, including New York and Texas, have also taken steps to regulate the industry.
