Following a supervisory overview and an investigation, the DFS discovered that the agency’s AML compliance program had “important deficiencies.” These included insufficient staffing, utilizing a transaction monitoring system that was inadequate for its measurement and transaction volumes, and failing to dedicate the assets wanted to deal with compliance dangers.
The division additionally discovered essential failures within the agency’s cybersecurity program: it did not totally deal with its operational dangers, the DFS mentioned, and did not totally adjust to DFS laws on this space.
“All of those deficiencies resulted from what the division discovered had been important shortcomings within the administration and oversight of [the firm’s] compliance packages, together with a failure to foster and keep an ample tradition of compliance,” it mentioned.
“As its enterprise grew, Robinhood Crypto failed to speculate the right assets and a spotlight to develop and keep a tradition of compliance — a failure that resulted in important violations of the division’s anti-money laundering and cybersecurity laws,” mentioned Adrienne Harris, the state’s superintendent of monetary providers, in a launch.
Cheryl Crumpton, affiliate normal counsel for Robinhood Markets Inc., mentioned in a press release, “We’re happy the settlement in precept reached final 12 months and beforehand disclosed in our public filings is now last. We’ve got made important progress constructing industry-leading authorized, compliance, and cybersecurity packages, and can proceed to prioritize this work to greatest serve our prospects.”