Robinhood Markets’ crypto arm has settled with California for $3.9 million, resolving allegations of blocking crypto withdrawals from 2018 to 2022.
Background
Robinhood Markets' crypto division reached a $3.9 million settlement with California authorities. The agreement addresses accusations that the platform froze crypto withdrawals for almost four years. This marks the first public action by the California Department of Justice against a cryptocurrency company.
Attorney General's Allegations
California Attorney General Rob Bonta stated that Robinhood Crypto LLC violated commodities laws by not providing customers with the cryptocurrencies they bought. The company forced its clients to sell their assets and leave the platform, unable to withdraw funds from 2018 to 2022. Bonta accused the platform of misleading its customers by claiming to possess their cryptocurrencies, while in some cases, the assets were held by other platforms. Furthermore, the Attorney General criticized Robinhood for deceptive advertising.
Settlement Outcomes
As a result of the settlement, Robinhood Crypto LLC has agreed to pay $3.9 million and allow its customers to withdraw funds to their personal wallets. This settlement resolves all current claims against the company within the state.
The $3.9 million settlement with California marks a significant step for Robinhood Markets, aiming to allow customers to withdraw their funds and avoid such issues in the future.
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