Robinhood settles $3.9 million case with California regulator over ban on cryptocurrency withdrawals

BlockBeats news, September 5, according to CoinDesk, Robinhood's cryptocurrency trading subsidiary has prevented customers from withdrawing the tokens they purchased in the past. Although Robinhood Crypto LLC abandoned the policy in 2022, its past practices were fined $3.9 million by the state of California.

The California Department of Justice investigated Robinhood's "historical practices" in its crypto business from 2018 to 2022. According to a press release from the California Department of Justice, Robinhood allowed customers to buy cryptocurrencies but did not allow them to personally keep custody of the assets, which violated California Commodity Law. Under the settlement agreement, Robinhood must continue to allow its customers to withdraw cryptocurrencies from the application and update disclosures about its custody practices.