MENLO PARK, Calif.—Robinhood Markets’ cryptocurrency arm expects to pay a $30-million fine to settle a New York state probe into its cybersecurity and anti-money-laundering practices, the mobile investing firm said in regulatory filings, a sharp increase from an earlier estimate of the potential penalty, The Wall Street Journal reported.
Robinhood said in revised paperwork for a public listing that its crypto unit, Robinhood Crypto, LLC, anticipates the payout as part of a proposed deal to end an investigation by financial regulators into allegedly lax security procedures.
“[Robinhood Crypto] and the [New York Department of Financial Services] have reached a settlement in principle with respect to these allegations, subject to final documentation, in connection with which, among other things, [Robinhood Crypto] expects to pay a monetary penalty of $30 million and engage a monitor,” the company said.
Robinhood first disclosed the investigation earlier this month when it filed paperwork to go public. The company told investors at the time that a proposed settlement with the New York Department of Financial Services would require Robinhood’s crypto brokerage to engage a monitor and pay a fine of at least $10 million, The Wall Street Journal said.