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ARTICLE · 19 AUGUST 2022

Familiar Themes In DFS's First Enforcement Action Against Virtual Currency Company

Morvillo Abramowitz Grand Iason & Anello
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On Aug. 2, 2022, the New York State Department of Financial Services (DFS) announced a consent order with Robinhood Crypto (RHC), the virtual currency trading platform of mobile trading...

United StatesTechnology
Karen R. King
Karen R. King
Alexander M. Levine
Alexander M. Levine

On Aug. 2, 2022, the New York State Department of Financial Services (DFS) announced a consent order with Robinhood Crypto (RHC), the virtual currency trading platform of mobile trading app provider Robinhood Markets, finding that RHC failed to maintain proper anti-money laundering (AML) and cybersecurity compliance programs. RHC agreed to a $30 million fine and an 18-month review by an independent compliance consultant who will report to DFS. Through this enforcement action, DFS has made clear its expectation that virtual currency companies, like traditional financial institutions, must invest in compliance programs to ensure they are commensurate with the risks and volume of their business, particularly for financial crimes compliance and cybersecurity.

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