Robinhood Markets Inc. (HOOD) has settled with the California Department of Justice for $3.9 million. This settlement stems from their previous ban on Bitcoin (BTC/USD) withdrawals.
Here’s what happened: Robinhood used to restrict customers from withdrawing their cryptocurrencies. Although they ended this policy in 2022, the investigation looked into practices from 2018 to 2022.
The California Department of Justice classified cryptocurrencies as commodities. They found that Robinhood's restriction on personal custody of these assets violated state law. As part of the settlement, Robinhood must allow crypto withdrawals and update its custody practices.
Lucas Moskowitz, Robinhood’s general counsel, mentioned in a statement to CoinDesk, “The settlement fully resolves the Attorney General’s concerns related to historical practices. We look forward to making crypto more accessible and affordable for everyone.”
Additionally, Robinhood faces scrutiny from the U.S. Securities and Exchange Commission. In May, the SEC indicated plans to file a lawsuit over alleged violations of federal securities laws.
This settlement is significant for Robinhood as they work to improve their cryptocurrency offerings. In early August, CFO Jason Warnick expressed optimism about the company’s future. He noted that clearer regulations would allow them to innovate faster and offer more coins.
Moreover, CEO Vlad Tenev shared ambitious plans for crypto integration during a podcast in August. He emphasized that Robinhood aims to create a future where crypto is a key part of the financial ecosystem.
After the company’s strong second-quarter results, analysts turned more positive on Robinhood stock. They see a good entry point for investors and expect continued growth.
On the trading front, Robinhood’s stock closed at $19.11 on Wednesday, down 1.34% for the day. In after-hours trading, the stock edged up by 0.16%. Year-to-date, Robinhood’s stock has surged by 54.49%, according to Benzinga Pro.