Robinhood’s crypto division expects US$30mln fine from New York regulator


Robinhood Markets Inc‘s crypto business said it expects to pay a fine of US$30mln to the New York State Department of Financial Services (NYDFS) as part of a settlement around alleged violations of the US state’s anti-money laundering rules.

The announcement, made in an amended initial public offering (IPO) document filed on Monday, follows documentation earlier this month when the company said it expected a US$15mln penalty would be “the bottom of the range for our probable loss in this matter”.

READ: Robinhood Markets sets sights for US$35bn valuation

The prospect of a fine arose in July 2020 when the NYDFS issued a report of its examination of Robinhood’s crypto business that cited a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues.

However, one upside for the company is that the settlement is likely to mean its IPO will go ahead soon despite initial concerns the probe could see the float pushed back into the Autumn.

The penalty will also add to the record US$70mln slapped on the firm by US financial regulator FINRA back in June for lax vetting and outages.

Float could be next week

Despite its regulatory snags, Robinhood priced its IPO on Monday at a range of between US$38-US$42 per share, which at the top end will give it a valuation of US$35bn.

Some 55mln shares are to be offered in the IPO, with founders Vlad Tenev and Baiju Bhatt and its CFO selling 2.63mln of these.

With the paperwork seemingly in place, some analysts are expecting the firm’s debut on the Nasdaq could occur next week.


Please enter your comment!
Please enter your name here