Robinhood, the platform that has become the focus of attention of investors with its ability to trade shares without commission, has expanded its investor base by allowing transactions for crypto money. Robinhood’s cryptocurrency division was said to be subject to fines of at least $15 million from the New York State Department of Financial Services (NYDFS) as a result of money laundering and cybersecurity concerns.
Stock trading platform; In its initial public offering (IPO), released last week, it stated “the lower end of the range for our potential loss in this matter” for an estimated $15 million penalty. He added that the current discussions with NYDFS could confirm over time whether this will be the end of the problem they are in.
Robinhood’s prospectus reveals rise in memestock trade and lawsuits
The possibility of another multimillion-dollar fine will put pressure on Robinhood’s cryptocurrency arm as a result of reports that the company is investigating parts of it as part of its broader scrutiny ahead of the planned listing by the SEC last month.
Robinhood has received great reactions with the arrangements they have made on social media recently. As a result of the investigations, it shows that the company actually means that its float, originally planned for summer, can be pushed into the fall.
Why will Robinhood pay a fine?
Another record-breaking $70 million penalty will be added to the firm as a result of the review and cuts made last week by US financial regulator FINRA. FINRA penalized Robinhood for causing “widely and massively harming its users” and making systematic mistakes since September 2016.
Jessica Hopper, Head of FINRA’s Executive Department, said: “This sentence, the highest sentence ever imposed by FINRA, reflects the scale and gravity of Robinhood’s violations of the law. “FINRA has found that the platform has provided millions of customers with false and misleading information.”
If the company allocates 20% to 35% of shares issued in the IPO to Robinhood clients, it is expected to reach a market capitalization of between $30-40 billion.