Robinhood Crypto settles California lawsuit over withdrawal restrictions
California’s Attorney General fined Robinhood for blocking customers from withdrawing their crypto assets, in violation of the state’s consumer protection laws.
Robinhood’s cryptocurrency platform has agreed to pay $3.9 million to settle claims it blocked customers from withdrawing crypto assets between 2018 and 2022. The California Attorney General’s office announced that Robinhood Crypto had violated state laws by preventing customers from accessing cryptocurrencies they had purchased, forcing them to sell their assets to leave the platform.
The platform was also accused of misleading customers regarding where their assets were held and falsely advertising competitive pricing through multiple trading venues. As part of the settlement, Robinhood will allow customers to withdraw their crypto assets to personal wallets and honour its commitments regarding trading practices.
Robinhood did not admit wrongdoing but expressed satisfaction with the settlement. The company aims to make cryptocurrency more accessible and affordable, according to a statement from its general counsel.
California’s Attorney General Rob Bonta emphasised that the settlement serves as a warning that all companies, including those in the cryptocurrency space, must comply with consumer protection laws. Robinhood shares rose slightly after the news.
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