Robinhood Crypto will pay $4 million to settle a lawsuit by the California DOJ

The agency accused the platform of restricting the ability of users to withdraw cryptocurrency

05.09.2024 - 09:03

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What’s new? The cryptocurrency division of the online broker Robinhood has agreed to pay $3,9 million to settle a California DOJ lawsuit. According to the state’s attorney general Rob Bonta, this was the first time the agency had filed a lawsuit against a crypto firm. The reason was that Robinhood Crypto suspended cryptocurrency withdrawals from 2018 to 2022.

Material by Cointelegraph

What else is known? According to the attorney general’s allegation, the company violated the state’s commodities laws because it allowed customers to buy cryptocurrency while failing to transfer these assets. As a result, customers were forced to sell the cryptocurrency to the Robinhood platform in order to withdraw their funds.

Rob Bonta also said that Robinhood Crypto misled users about storing assets on its own platform, while in some cases they were located on other trading platforms.

In addition, according to the prosecutor, Robinhood Crypto misled users with advertising claims about offering competitive prices by connecting to multiple trading platforms, which was not always true.

The platform itself neither admits nor denies the charges, but agrees to pay the fine. In addition to the fine, the agreement stipulates that the platform will allow customers to withdraw cryptocurrencies to their own wallets, as well as clarify and enforce its rules on trading, order processing, and asset custody.

Broker Robinhood launches crypto trading in Hawaii, Virgin Islands, and Puerto Rico

Earlier, the broker announced the purchase of AI-based analytics platform Pluto Capital

Earlier, broker Robinhood launched a $1 billion buyback program to repurchase its HOOD securities from shareholders.

HOOD is trading at $19,11 on the Nasdaq, having lost 1,34% in 24 hours and 10% in five days. At the same time, the growth for the month amounted to 30%, and since the beginning of the year, the securities rose in price by 50%.

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