Robinhood Markets (HOOD.O) will pay $3.9 million to settle allegations that it failed to allow customers to withdraw their cryptocurrency from 2018 to 2022, California Attorney General Rob Bonta announced on Wednesday. This is the first public enforcement action by Bonta’s office against a cryptocurrency firm.
According to Bonta, Robinhood Crypto LLC violated the state’s commodities laws by not delivering the cryptocurrencies that customers had purchased, which prevented them from withdrawing their assets and forced them to sell them to exit the platform.
Additionally, Bonta claimed that Robinhood misled customers about the custody of their crypto assets and falsely advertised that it would connect users to multiple trading venues for competitive pricing.
Robinhood did not admit to any wrongdoing but agreed to the settlement, which includes requirements for allowing customers to withdraw crypto assets to their own wallets and to adhere to its advertised trading and order handling practices.
Lucas Moskowitz, Robinhood’s general counsel, stated that the company is pleased to settle and aims to make cryptocurrency “more accessible and affordable to everyone.“
In a separate statement, Bonta stated that the settlement “should send a strong message: whether you’re a brick-and-mortar store or a cryptocurrency company, you must adhere to California’s consumer and investor protection laws.”
