Crypto division of Robinhood bags $10 million fine for cybersecurity and AML violations
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Crypto division of Robinhood bags $10 million fine for cybersecurity and AML violations

Saudu Clement
Saudu Clement

The cryptocurrency arm of Robinhood is facing a charge of at least $10 million for allegedly violating state rules on cybersecurity and anti-money laundering (AML).

The firm made the disclosure in a filing last week. The company, in the July 1 filing, said that it was being accused of discrepancies in its system alongside the lack of a response plan.

...certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security.

The said fine by New York state regulators could exceed $15 million pending ongoing investigations. It is the latest in a series of penalties to hit Robinhood. It had previously been ordered to pay a $70 million fine by the Financial Industry Regulatory Authority (FINRA) in June.

The clampdown on Robinhood does not come as a surprise. Several other companies, including Binance, have come under increased scrutiny over the past few weeks.

The financial services company has warned investors that its base can be disrupted by cyber attacks. Last year, the accounts of some users were reportedly compromised. Meanwhile, Robinhood is preparing to launch an Initial Public Offering (IPO) that has been stalled by setbacks.