Key Takeaways:
- Robinhood Crypto LLC settled with California’s Department of Justice for $3.9 million over crypto withdrawal restrictions from 2018-2022.
- Allegations include misleading customers about asset custody and failing to provide competitive trading options as advertised.
- The settlement mandates external wallet withdrawals and accurate representation of trading practices.
Robinhood Crypto LLC has agreed to a $3.9 million settlement with California’s Department of Justice over claims that it blocked customers from withdrawing cryptocurrency between 2018 and 2022.
The settlement follows allegations that Robinhood’s crypto division allowed users to buy crypto but restricted them from withdrawing it, forcing customers to sell their assets back to the platform to access their funds.
Robinhood in $3.9 mln settlement with California over crypto withdrawals https://t.co/PYhDFLizei pic.twitter.com/X9jA7emSOf
— Reuters (@Reuters) September 5, 2024
California Attorney General Rob Bonta announced that Robinhood also misled customers by claiming it held their assets, when they were sometimes held by other venues.
Additionally, the company allegedly misrepresented its trading practices, advertising connections to multiple venues for competitive pricing, which wasn’t always the case.
Robinhood to settle $3.9 million penalty with California DOJ over past crypto withdrawal restrictions https://t.co/rbq9UjHnZh
— The Block (@TheBlock__) September 5, 2024
The settlement, finalized on August 31, requires Robinhood to permit withdrawals to external wallets and accurately represent its trading practices and asset custody.
Robinhood did not admit or deny the allegations, but Bonta emphasized the importance of compliance with California’s consumer protection laws in the settlement announcement.
About The Author
Adam Morris, the co-founder of Crypto Head and a respected crypto expert, offers insightful commentary and analysis on cryptocurrency, NFTs, and the evolving digital landscape.
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