- California AG Rob Bonta has reached a settlement with Robinhood Crypto, LLC (Robinhood) to resolve an investigation into allegations that the cryptocurrency trading platform violated the California Commodities Law by restricting customers’ ability to withdraw cryptocurrency from their accounts and failing to fully disclose details of its trading and order handling agreements.
- According to the settlement, Robinhood is accused of preventing customers from accessing “actual physical delivery” or its electronic equivalent of cryptocurrency assets, and delaying the settlement of certain transactions during periods of network instability, including “51% attacks” on blockchains and issues related to order routing. The company is also alleged to have failed to adequately inform customers of these risks.
- Under the terms of the settlement, Robinhood will pay $3.9 million to the state, allow customers to withdraw cryptocurrency to their own wallets, ensure accurate representations of its trading and order handling practices, and clarify in its customer agreements the custodial status of cryptocurrency. The settlement also mandates that Robinhood disclose to the AG’s office any incidents that may delay settlement for longer than a week.