BIG CASH – Robinhood Agrees to $3.9M Settlement with California on Crypto Disputes
According to Reuters, On September 4, California Attorney General Rob Bonta announced that Robinhood Markets’ cryptocurrency platform will pay $3.9 million to settle claims that it failed to allow customers to withdraw cryptocurrency from their accounts between 2018 and 2022. This civil settlement marks the first public action by Bonta’s office against a cryptocurrency company.
Allegations Against Robinhood Crypto
According to Bonta, Robinhood Crypto violated California law by preventing customers from withdrawing cryptocurrencies they had purchased. This left users unable to access their assets, forcing them to sell in order to exit the platform. Additionally, the platform was accused of misleading customers about the location of their crypto assets and falsely advertising that it would connect them to multiple trading venues to secure competitive prices.
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Settlement Terms and Robinhood’s Response
Robinhood did not admit or deny any wrongdoing as part of the settlement. However, the agreement requires the platform to enable customers to withdraw their crypto assets to their own wallets and to uphold its claims about trading and order handling practices.
Lucas Moskowitz, Robinhood’s general counsel, expressed satisfaction with the settlement, stating that the company looks forward to making cryptocurrency “more accessible and affordable to everyone.”
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California Attorney General’s Statement
In a separate statement, Attorney General Bonta emphasized that the settlement should serve as a warning to all companies: “Whether you’re a brick-and-mortar store or a cryptocurrency company, you must adhere to California’s consumer and investor protection laws.”
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Robinhood Shares React
Following the announcement, Robinhood’s shares saw a slight increase, rising 12 cents to $19.23 in after-hours trading.