The New York Department of Financial Services, or NYDFS, has fined cryptocurrency arm Robinhood $30 million for suspected violations of anti-money laundering, cybersecurity and consumer protection regulations.

NYDFS Superintendent Adrienne Harris announced Tuesday that Robinhood Crypto will pay a $30 million fine to the state “for serious violations of the Bank Secrecy/Anti-Money Laundering Accountability Act” and cybersecurity issues that allegedly violated New York regulations. Robinhood’s crypto subsidiary will also be forced to hire an independent consultant to look into the firm’s compliance and rehabilitation activities, according to Harris.

“As its business grew, Robinhood Crypto failed to devote the necessary resources and attention to building and maintaining a culture of compliance,” Harris said. “All New York State licensed virtual currency organizations are subject to the same anti-money laundering, consumer protection and cybersecurity rules as traditional financial services companies.”

According to the cooperation order, the NYDFS investigated Robinhood Crypto between January and September 2019 and said it discovered “serious deficiencies in RHC’s compliance function in several areas.” The NYDFS then opened an enforcement investigation and found that Robinhood’s crypto subsidiary had violated portions of the Bank Secrecy Act and Anti-Money Laundering (AML) regulations.

Among the violations were claims that Robinhood Crypto did not switch to a sufficiently scalable transaction monitoring system or “dedicated sufficient resources to effectively address risks.” In addition, the tax authority alleged that Robinhood did not maintain a “phone number for collecting client complaints” as part of the supervision agreement.

Robinhood’s joint attorney for litigation and enforcement, Cheryl Crumpton, told Cointelegraph that in 2021, the company reached an agreement in principle with the NYDFS and disclosed the situation in a public newspaper. Crumpton says Robinhood has made “substantial progress” in developing “leading-edge legal, compliance and cybersecurity programs.”

The U.S. Financial Industry Regulatory Authority fined Robinhood $70 million in June 2021 for allegedly causing “extensive and serious harm” to thousands of users and demonstrating “systematic oversight deficiencies” since September 2016. HOOD shares were trading at 9 at the time of publication dollars, down 0.3 percent over the previous 24 hours.

Featured Image: DepositPhotos @iqoncept.

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