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ARTICLE · 12 AUGUST 2022

New York Financial Regulator Brings First AML And Cybersecurity Enforcement Action Against Licensed Crypto Trading Entity

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In what is the New York Department of Financial Services' (NYDFS) first enforcement action against a NYDFS-licensed "virtual currency business,"...

United StatesTechnology
Seetha Ramachandran
Seetha Ramachandran
Jonathan Mollod
Jonathan Mollod
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In what is the New York Department of Financial Services' (NYDFS) first enforcement action against a NYDFS-licensed "virtual currency business," on August 1, 2022, the agency announced $30 million settlement with cryptocurrency investing platform Robinhood Crypto, LLC ("RHC"). The settlement addressed charges stemming from what the NYDFS cited as various deficiencies during 2019-20 of RHC's Bank Secrecy Act (BSA) and anti-money laundering (AML) program and RHS' cybersecurity obligations under the agency's Virtual Currency "BitLicense" regulation (23 NYCRR Part 200) and Cybersecurity Regulation (23 NYCRR Part 500), among other things

NYDFS has been active in crypto regulation for many years. In 2015, New York was the first state to promulgate a comprehensive framework for regulating virtual currency-related businesses. The keystones of the BitLicense regulations are consumer protection, anti-money laundering compliance and cybersecurity rules that are intended to

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