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A crypto trading subsidiary of Robinhood Markets (NASDAQ:HOOD) reached a $3.9M settlement with the state of California. The allegations pertained to the platform Robinhood Crypto —failing to allow customers to withdraw their cryptocurrency from 2018 to 2022.
The California Attorney General, Rob Bonta, pointed out that Robinhood (HOOD) did not permit customers to withdraw their purchased cryptocurrencies to wallets, effectively forcing them to sell their assets back to the platform to exit trading.
Furthermore, Robinhood (HOOD) failed to disclose where the customer assets were held and advertised that it would connect customers to multiple trading venues to ensure they got competitive prices.
This settlement marks the first public enforcement action by the California Department of Justice against a cryptocurrency company. The platform must enable users to withdraw their cryptocurrency assets to personal wallets as part of the settlement.
No wrongdoing was acknowledged or denied by the company. General counsel for Robinhood (HOOD), Lucas Moskowitz, expressed his satisfaction with the settlement in a statement to Reuters, adding that the business was looking forward to making cryptocurrencies “more accessible and affordable to everyone.”
Shares of Robinhood (HOOD) were trading marginally higher, up 0.16% to $19.14 on Thursday during pre-market trade.
