Robinhood to lay off 23% of staff, fined $30 million for crypto business unit
This article comes fromDecrypt, original author: André Beganski
Odaily Translator |
This article comes from
, original author: André Beganski
Odaily Translator |The New York State Department of Financial Services (NYDFS) has fined Robinhood Crypto $30 million for multiple regulatory violations.
According to a statement released Tuesday by NYDFS
Note:, in addition to paying the fine, Robinhood Crypto will need to hire an independent consultant to assess its compliance with state regulations. The company has also been criticized for not posting a dedicated phone number for customer complaints on its website.NYDFS Superintendent Adrienne Harris said, "As the business grew, Robinhood Crypto failed to dedicate the appropriate resources and attention to developing and maintaining a culture of compliance."Note:
compliance culture
It is to ensure that all members of a unit or a team can consciously comply with the law and regulations, and establish the concept of compliance, advocate a compliance atmosphere, strengthen compliance management, and create a compliance environment within the unit and team. atmosphere, forming a good soft environment.
A bank's compliance culture is a definition derived from the compliance risks stipulated in the Basel Accords on how the bank avoids such risks.
The NYDFS alleges that Robinhood Crypto's anti-money laundering program was "understaffed" -- using manual systems to monitor transactions even as user numbers grew -- and that its cybersecurity program had serious failures. The regulator said the breaches were due to a lack of management and oversight, demonstrating its "failure to foster and maintain an appropriate culture of compliance".Despite these deficiencies, Robinhood filed a license application with the department, saying it was fully compliant with anti-money laundering and cybersecurity regulations in 2019. Regulators believe it violates the law.“All virtual currency firms licensed in New York State are subject to the same anti-money laundering, consumer protection, and cybersecurity regulations as traditional financial services firms,” Harris said. “When any licensed firm violates the law, DFS will continue to Investigate and take action."
Robinhood's cryptocurrency trading arm has been an increasing focus for the company, with the service adding support for more coins. In April this year,Robinhood reports $54 million in cryptocurrency revenue for the first quarter of this year。
, up from $48 million in the fourth quarter of 2021 but down from $88 million a year earlier.
The company announced that it will cut 9% of its workforce
A Robinhood representative said the company is pleased to have reached a settlement with New York regulators and will work to prioritize regulatory compliance.
"We've made significant progress in building an industry-leading legal, compliance, and cybersecurity program," Cheryl Crumpton, Robinhood's deputy general counsel for litigation and regulatory enforcement, said in an email. Accessible, lower-cost platform to buy and sell cryptocurrencies.”secondary titleRobinhood will lay off about 23% of its staff, Q2 encryption trading business revenue increased by 7% month-on-month
In addition to being fined, bad news continued to come throughout the day. Robinhood announced a new round of layoffs.Robinhood CEO Vlad Tenev wrote:
