Robinhood’s crypto division is expected to pay $15 million in fines to settle its outstanding legal dispute against the New York Department of Financial Services (NYDFS) for allegedly failing to handle anti-money laundering and cybersecurity issues adequately. This piece of news came amidst the major trading platform’s application filing with the US Securities and Exchange Commission (SEC) to officially go public. This reinforces the notion of many that Robinhood is set to be observed even closer as it expands its crypto offerings further.
As per the platform’s filing, it has initially set aside $10 million last year, while the other $5 million was compiled earlier this year just so that it could conclude its issues with the NYDFS. Notably, this NYDFS $15 million settlement announcement came only a week after Robinhood agreed to pay FINRA’s $70 million fine for allegedly failing to supervise its systems properly. The regulators claim that the failure has put its users in apparent harm.
While $15 million can seem not that inconsequential compared to the figures garnered by Robinhood, the obligation to undergo monitoring is what is seen by many as the most arduous. While appointed monitors are but there to “monitor” and observe, companies believe that such could potentially slow down operations. And as for Robinhood, being under a monitor could hinder its outstanding efforts to upscale crypto operations to compete at an even higher level.