Robinhood Crypto News: $3.9M Settlement for Withdrawal Issues

Robinhood Crypto News: $3.9M Settlement on Withdrawal Dispute

Robinhood Crypto LLC, the cryptocurrency arm of Robinhood Markets, has agreed to a $3.9 million settlement with California’s Department of Justice. This settlement is the result of an investigation into the company's practices regarding cryptocurrency withdrawals. 

Robinhood Crypto LLC Agrees to $3.9 Million Settlement

Robinhood Crypto LLC, the cryptocurrency arm of Robinhood Markets has reached a $3.9 million settlement with California’s Department of Justice. This resolution comes after an investigation into the company’s practices surrounding Robinhood crypto withdrawal issues. 

The settlement is a significant development in the latest crypto news, marking the first major legal action by the California Department of Justice against a crypto firm. The case underscores concerns about cryptocurrency custody and transparency.

California Attorney General's Allegations

California Attorney General Rob Bonta announced the Robinhood crypto settlement on September 4, accusing Robinhood Crypto LLC of breaching state commodities laws. 

Bonta alleged that Robinhood for crypto users were able to purchase cryptocurrency but were not able to access their assets. Instead, customers had to sell their crypto back to Robinhood Crypto to withdraw their funds. 

Furthermore, Robinhood crypto trading practices were called into question, with accusations that the company misled users about its crypto holdings and failed to provide competitive trading prices, which were not always accurate.

Settlement Terms and Compliance Measures

Under the terms of the Robinhood crypto settlement, the company must pay $3.9 million in penalties and implement corrective measures. 

Robinhood Crypto LLC is now required to allow customers to withdraw their cryptocurrency to personal wallets, improve transparency in Robinhood crypto trading and order handling, and address past inaccuracies about crypto custody. 

The settlement also demands that Robinhood Crypto clarify its representations regarding crypto holdings and adhere to these commitments moving forward.

Robinhood's Response and Stock Impact

Robinhood has neither admitted nor denied any wrongdoing but expressed relief at resolving the issue. 

Lucas Moskowitz, Robinhood’s general counsel noted that the company is eager to continue making Robinhood crypto services more accessible and affordable. 

Following the announcement, Robinhood's stock (HOOD) saw a slight decline of 1.34% to $19.11 on September 4, although it recovered slightly in after-hours trading. Despite this, HOOD has experienced a 54.5% increase this year, fueled by a resurgence in retail trading and the return of prominent traders like Keith Gill. 

The Robinhood crypto staking and Robinhood crypto list have also seen significant attention amidst this news.

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