BITNEWS

Robinhood failed to allow users withdraw crypto from their accounts: DOJ

(KRON) -- On Wednesday, California Attorney General Rob Bonta announced a $3.9 million settlement with a Menlo Park cryptocurrency trading platform, Robinhood Crypto, LLC.According to the DOJ, the settlement comes after the cryptocurrency platform "failed to allow customers to withdraw their cryptocurrency from their Robinhood accounts from 2018 to 2022" and for failing to disclose aspects of its trading and "handling arrangements." "Whether you're a brick-and-mortar store or a cryptocurrency company, you must adhere to California's consumer and investor protection laws. I am dedicated to using all the tools available to my office to protect California consumers in the face of advancing technology in the marketplace," Bonta said.San Jose considers ban on AI-powered rent-fixing technologyRobinhood is a popular trading platform for buying and selling cryptocurrency, a digital currency recently becoming increasingly popular as a form of digital investment. Famous cryptocurrencies include Bitcoin and Ethereum. The investigation by the California Department of Justice concluded the following: Robinhood sold commodities contracts in violation of the California Commodities Law (CCL) by allowing customers, who hoped their investment would become more valuable shortly, to buy cryptocurrencies without actually delivering these assets to customers. During that period, customers could not withdraw their cryptocurrency and were forced to sell it back to Robinhood to exit the trading platform. California Attorney General Rob Bonta's officeRobinhood also misled its customers. According to the DOJ, Robinhood would connect to multiple trading venues to ensure the most competitive prices between them, which "was not always true." The company also claimed that all of its users' cryptocurrency was housed with Robinhood. "Despite these assurances, Robinhood did not tell customers that there were instances in which it arranged for trading venues to hold customer assets for extended periods," Bonta's office wrote. Robinhood-Crypto-settlement-agreement-ExecutedDownloadIn addition to the $3.9 million penalty, Robinhood must:Allow customers to withdraw their cryptocurrency assets from Robinhood to their own cryptocurrency wallets.Ensure that its rules to customers about its trading and order handling practices "materially comport with such practices, including the routing of orders to trading venues, and cryptocurrency purchase and sale prices."Make clear to customers that Robinhood will house cryptocurrency that customers own, update its customer agreement, and disclose to the attorney general's office any incident that results in delayed settlement for "longer than one week.""While cryptocurrency is fairly new, California has strong and enduring consumer protection laws that protect Californians against misrepresentations, including cryptocurrency companies," Bonta said.

ONLY AVAILABLE IN PAID PLANS

Published by: kron4

Read full article here: https://www.kron4.com/news/bay-area/crypto-company-failed-to-allow-users-to-withdraw-from-their-accounts-doj/