Robinhood Crypto, a cryptocurrency platform operated by Robinhood Markets (HOOD), has agreed to pay $3.9 million to resolve claims that it prevented customers from withdrawing cryptocurrency from their accounts between 2018 and 2022, California Attorney General Rob Bonta announced on Wednesday.
This civil settlement marks the first public action taken by Bonta’s office against a cryptocurrency company. According to Bonta, Robinhood violated California law by failing to deliver purchased cryptocurrencies to customers, leaving them unable to withdraw their assets. As a result, many users were forced to sell their assets in order to exit the platform.
Additionally, Robinhood was accused of misleading its customers about the location of their crypto holdings and falsely advertising that it would connect users to multiple trading venues to secure competitive prices.
While Robinhood did not admit or deny any wrongdoing in the settlement, the platform has agreed to allow customers to withdraw their crypto assets to external wallets and honour its promises regarding trading practices.
Lucas Moskowitz, Robinhood’s general counsel, expressed satisfaction with the settlement and highlighted the company’s commitment to making cryptocurrency “more accessible and affordable to everyone.”
Attorney General Bonta, in a separate statement, underscored that the settlement should serve as a strong warning, saying, “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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