Robinhood has agreed to a $3.9 million settlement with the California Department of Justice (DOJ) to resolve claims related to restrictions on cryptocurrency withdrawals from 2018 to 2022. This settlement represents the first action by the California DOJ against a cryptocurrency company.
Robinhood Violated State Laws
California Attorney General Rob Bonta alleged that Robinhood Crypto violated state laws by restricting customers' control over their crypto assets. Instead of allowing users to withdraw their cryptocurrencies directly, Robinhood required them to sell their assets to access funds. The company was also accused of not consistently providing competitive pricing across various trading venues, as it had promised.
As part of the settlement, Robinhood will now enable customers to withdraw their cryptocurrencies to personal wallets and enhance transparency about its trade handling and custody practices.
While Robinhood did not admit to any wrongdoing, its General Counsel, Lucas Moskowitz, expressed satisfaction with resolving the issue and focusing on improving crypto accessibility. Following the announcement, Robinhood shares (HOOD) initially fell 1.34% to $19.11 on September 5 but saw a slight recovery afterward.
Looking Ahead: This settlement is part of Robinhood’s broader effort to rehabilitate its image. Earlier this year, the return of meme stock trading advocate Keith Gill helped boost the company’s stock by 54.5% in 2024.
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