Robinhood Reaches $3.9M Settlement With California Over Blocking Cryptocurrency Withdrawals

Robinhood Markets Inc. HOOD has agreed to a $3.9 million settlement with California’s Department of Justice over its past ban on Bitcoin BTC/USD cryptocurrency withdrawals.

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Robinhood’s previous policy, which restricted customers from withdrawing their purchased cryptocurrencies, led to the settlement. Although the policy ended in 2022, the investigation covered the company’s practices from 2018 to 2022. The California Department of Justice found that Robinhood’s restriction on personal custody of cryptocurrencies violated state commodities law. As part of the settlement, Robinhood will continue allowing crypto withdrawals and improve its custody disclosures.

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Lucas Moskowitz, general counsel for Robinhood Markets, said in a statement to CoinDesk, “The settlement fully resolves the Attorney General’s concerns related to historical practices, and we look forward to continuing to make crypto more accessible and affordable to everyone.”

While some users have chosen to switch platforms following past controversies, Robinhood continues to offer an accessible and user-friendly experience. For those seeking Robinhood alternatives, platforms like Webull and SoFi provide similar features and benefits, often appealing to more crypto-savvy users.

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Despite facing scrutiny from the U.S. Securities and Exchange Commission over alleged federal securities law violations, Robinhood is pushing forward with its plans to enhance cryptocurrency offerings. CEO Vlad Tenev discussed in August the company’s vision for deeper crypto integration into the financial ecosystem, reinforcing its commitment to innovation.

For those investing through mobile devices, the ease of buying stocks or crypto on platforms like Robinhood, especially via an iPhone, remains a key selling point. Analysts continue to see growth potential in Robinhood’s stock, suggesting that now may be a good entry point for investors interested in the platform's continued development.

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