Robinhood fined $3.9 million by California for cryptocurrency withdrawal issues
ChainCatcher News: The California Department of Justice has imposed a $3.9 million fine on Robinhood's cryptocurrency trading subsidiary, Robinhood Crypto LLC, for past actions.
The company had prohibited users from withdrawing purchased cryptocurrencies from 2018 to 2022. Although Robinhood abandoned this policy in 2022, the California Department of Justice still conducted an investigation. The investigation viewed the cryptocurrencies traded by Robinhood as commodities and determined that the company failed to allow users to have custody of their personal assets, violating California commodity laws. Under the settlement agreement, Robinhood must allow users to withdraw cryptocurrencies from the app and update disclosures regarding its custody practices. Robinhood Crypto is also facing a separate review by the U.S. Securities and Exchange Commission, which indicated in May that it is preparing to sue the company for violating federal securities laws.