The digital assets branch of Robinhood Markets has agreed to pay a settlement of $3.9 million to California’s Justice Department for allegedly halting cryptocurrency withdrawals between 2018 and 2022.
According to California Attorney General Rob Bonta, this is the first public action taken by the state’s Department of Justice against a cryptocurrency company.
Bonta accused Robinhood Crypto LLC of violating the state’s commodities laws by allowing customers to purchase cryptocurrencies without actually delivering the assets to them. Instead, customers were forced to sell their crypto back to Robinhood in order to access their funds.
Furthermore, Bonta claimed that Robinhood misled its users by stating that it held their cryptocurrencies, when in reality, the assets were held by other trading platforms.
The company also falsely advertised that it would connect to multiple trading venues to provide competitive prices, which was not always the case.
