Robinhood in $3.9 million settlement with California over crypto withdrawals

A cryptocurrency platform run by Robinhood Markets will pay $3.9 million to settle claims that it failed to allow customers to withdraw cryptocurrencies from their accounts from 2018 to 2022, California Attorney General Rob Bonta said.

The civil settlement with Robinhood Crypto is the first public action by Bonta’s office against a cryptocurrency company.

Bonta said Robinhood violated California law by failing to deliver the cryptocurrencies its customers had purchased, leaving customers unable to withdraw their assets and forcing them to sell their assets to exit the platform.

The attorney general said Robinhood misled customers about where their crypto assets were held and through advertising would connect customers to multiple trading venues to ensure they were priced competitively.

Robinhood has not admitted or denied wrongdoing. The agreement also requires the platform to allow customers to withdraw crypto assets into their own wallets and to honor their statements about its trading and order handling practices.

Lucas Moskowitz, Robinhood’s general counsel, said in a statement that the Menlo Park, Calif.-based company was excited to settle and looked forward to making cryptocurrency “more affordable and accessible to everyone.”

In a separate statement, Bonta said the settlement “should send a strong message: Whether you’re a brick-and-mortar store or a cryptocurrency company, you must comply with California’s consumer and investor protection laws.”

Robinhood shares rose 12 cents to $19.23 in after-hours trading.

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler and David Gregorio)

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