Summary:
- Settlement Amount: Robinhood’s cryptocurrency platform will pay $3.9 million in a settlement with the California Department of Justice for preventing customers from withdrawing their crypto between 2018 and 2022.
- California Law Violations: Attorney General Rob Bonta stated that Robinhood violated state laws by failing to deliver purchased crypto and misleading customers about asset storage and competitive pricing.
- Withdrawal Requirement: As part of the settlement, Robinhood is now required to allow users to withdraw their crypto assets and uphold transparency in its trading practices.
- Stock Performance: Over the past six months, Robinhood’s stock has risen by 16.5%, outperforming its industry’s growth of 10.3%.
Robinhood Markets, Inc.’s cryptocurrency platform has agreed to pay $3.9 million in a settlement with the California Department of Justice, addressing claims that the company prevented customers from withdrawing their cryptocurrency assets between 2018 and 2022. According to California Attorney General Rob Bonta, Robinhood violated state consumer protection laws by not delivering the crypto assets customers had purchased and forcing them to sell their holdings to exit the platform.
Additionally, the DOJ found that Robinhood misled users regarding the location of their crypto assets and falsely advertised that it would connect customers to multiple trading venues to ensure competitive prices.
As part of the settlement, Robinhood will now be required to allow customers to withdraw their cryptocurrency to their own wallets and improve transparency around its trading and order handling processes.
“This settlement sends a clear message: whether you’re a traditional retailer or a cryptocurrency company, you must follow California’s consumer and investor protection laws,” Bonta stated.
Despite these regulatory challenges, Robinhood’s stock has performed well, gaining 16.5% over the past six months, compared to the industry average of 10.3% growth.
Disclaimer:
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