New York regulators slapped a $30 million fine on Robinhood Crypto.

Robinhood Crypto was fined $30 million by the New York Department of Financial Services for several regulatory infractions.

Following an inquiry, the agency decided that the corporation had failed to maintain sufficient cybersecurity safeguards or to meet anti-money laundering duties. Robinhood Crypto was found to be in violation of the department's virtual currency, money transmitter, transaction monitoring, and cybersecurity requirements.

Aside from paying the penalties, Robinhood Crypto will be compelled to employ an independent consultant to examine its compliance with state regulations, according to a statement from the commission. The corporation was also chastised for not including a specific phone number on its website where customers could lodge complaints.

“As its business expanded, Robinhood Crypto failed to commit the necessary resources and attention to build and sustain a compliance culture,” said Adrienne Harris, superintendent of New York's Department of Financial Services.

The agency claims that Robinhood Crypto's anti-money laundering program was “inadequately staffed,” employing a manual system for monitoring transactions even as its user base grew, and that its cybersecurity program had major flaws. The violations, according to regulators, were caused by a lack of management and control, demonstrating a “failure to establish and maintain an effective culture of compliance.”

Despite the flaws, Robinhood applied for a license with the government, claiming that company would be in full compliance with anti-money laundering and cybersecurity standards in 2019. This was judged to be illegal by the regulator.

According to Harris, “all virtual currency organizations regulated in New York State are subject to the same anti-money laundering, consumer protection, and cybersecurity rules as traditional financial services companies.” “DFS will continue to investigate and prosecute licensees who break the law.”

As the site adds additional coins, Robinhood's cryptocurrency trading section has become a significant emphasis for the company. It reported $54 million in revenue for the first quarter of this year in April, up from the previous quarter ($48 million) but down from the prior year ($88 million).

However, in the midst of current market instability, Robinhood has moved its focus from growth to better cost management, one of several factors contributing to decreased demand for financial services from retail investors. It reduced its employment by 9% just days before its first earnings conference of the year.

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