Robinhood Settles Charges with California Department of Justice

Robinhood’s subsidiary for trading cryptocurrencies previously prohibited customers from withdrawing the tokens they purchased.

Even though this policy was abandoned in 2022, Robinhood Crypto LLC faced consequences for its actions on Wednesday, receiving a $3.9 million penalty from the state of California.

The California Department of Justice had launched an investigation into the company’s “historical practices” in their crypto business from 2018 to 2022, which eventually led to the settlement.

Notably, the investigation focused on treating the various cryptocurrencies offered by Robinhood as commodities.

By not allowing customers to have personal control over their purchased assets, the company violated California’s commodities law, as stated in a press release by the state’s Department of Justice.