New York State Department of Financial Services Imposes $30 Million Fine in First Cryptocurrency Enforcement Action | White & Case LLP

[Gunnar Larson]

https://www.whitecase.com/insight-alert/new-york-state-department-financial-services-imposes-30-million-fine-first#:~:text=On%20August%202%2C%20in%20its,AML%20Program%22)%20and%20its%20cybersecurity


On August 2, in its first ever cryptocurrency enforcement action, the New
York State Department of Financial Services ("NYDFS") announced it had
imposed a $30 million fine on Robinhood Crypto, LLC ("RHC") for failures in
its Bank Secrecy Act and anti-money laundering program ("BSA/AML Program")
and its cybersecurity program, and for non-compliance with notice
requirements in its January 2019 supervisory agreement with the NYDFS
("Supervisory Agreement"), which RHC entered into with the NYDFS as a
condition of obtaining its virtual currency business license.

The NYDFS charged RHC, the cryptocurrency trading division of Robinhood
Markets, Inc. ("RHM"), with violating the Department's Cybersecurity
Regulation (23 NYCRR Part 500), Virtual Currency Regulation (NYCRR Part
200), Money Transmitter Regulation (3 NYCRR Part 417), and Transaction
Monitoring Regulation (23 NYCRR Part 504). RHC holds a Virtual Currency
license ("BitLicense") in New York under 23 NYCRR § 200. As a BitLicense
holder, RHC is subject to NYDFS-mandated BSA/AML Program and cybersecurity
requirements, among other things.
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