Retail giant Robinhood has settled with the state of California for millions of dollars after an investigation found that users were prevented from withdrawing their funds.
In a new press release, the California Department of Justice says Attorney General Robert Bonta has settled with Robinhood’s crypto arm for $3.9 million for not letting customers withdraw crypto from their accounts between 2018 and 2022.
According to the state, Robinhood violated the law because it allegedly sold commodities to traders without actually delivering the assets and then didn’t let customers withdraw their crypto to leave the platform. Instead, customers were reportedly forced to sell back their crypto to leave Robinhood.
Additionally, the investigation concluded that Robinhood misled customers by claiming that its trading platform operated through multiple marketplaces to find the best price for assets and that the platform itself would hold customer assets.
As Bonta states in the press release:
“Although cryptocurrency is relatively new, California has strong and enduring consumer protection laws that protect Californians from misrepresentation, including by cryptocurrency companies. Our investigation and the settlement with Robinhood should send a strong message: whether you are a brick-and-mortar store or a cryptocurrency company, you must comply with California’s consumer and investor protection laws.”
In addition to paying the fine, Robinhood has also agreed to let customers withdraw their crypto assets from the platform to their own crypto wallets and provide customers with appropriate disclosures and updates.
In the official settlement agreement, Robinhood did not admit or deny any violations of the law.
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
Follow us further XFacebook and Telegram
Surf to the Daily Hodl mix
Generated image: Midjourney
