According to data from Google Finance, Robinhood’s stock price has tanked 1.34% to 19.11 USD. This comes after recent news of the entity’s legal settlement and an expansion of its operations in the United Kingdom.
The California Department of Justice ended its investigation into what Robinhood’s lead counsel described as “historical practices” in the popular trading app’s crypto business from 2018 to 2022.
Source: Google Finance
Robinhood’s crypto-trading subsidiary previously prevented customers from withdrawing the tokens they purchased. On Wednesday, the state of California issued a $3.9 million fine to Robinhood Crypto LLC for its past practices. This is despite the fact that the company abandoned that policy in 2022.
The state’s investigation specifically treated all of the cryptocurrencies that could have been purchased and sold through Robinhood as commodities.
According to a press release from the California Department of Justice, the company violated California commodities law by allowing users to buy crypto but without allowing them to take personal custody of the assets.
Robinhood legal settlement bids bad market trade
As stipulated in the settlement agreement, the brokerage firm is required to update its disclosures regarding trading and custody practices and facilitate ongoing crypto withdrawals. Despite the announcement that these long-standing issues had been resolved, company stock price experienced a 1.34% decline to 19.11 USD.
The settlement also emphasizes past inconsistencies in its operations, including the assertion that it connected to multiple trading venues to guarantee competitive prices while failing to disclose specific custodial practices adequately.
The stock market responded lightly to the news despite the fact that these practices, which have since been rectified, were intended to more closely align the financial services provider with consumer protection legislation.
In May, the U.S. Securities and Exchange Commission informed Robinhood Crypto that it is preparing to file a lawsuit due to alleged violations of federal securities laws.
On the other hand, the brokerage firm has been expanding its services internationally, with a significant drive into the United Kingdom following its regulatory challenges in the United States. The financial services provider introduced its platform on September 4, which allowed British customers to lend out completely paid stocks.
“Since launching Robinhood in the UK last November, we’ve heard from customers what’s resonating in-app and what features they’d like to see in the future […] So far, we know they love no commission fees and no FX fees on trades, our easy-to-use mobile app and key features such as fractional shares and 24/5 trading.”
Robinhood
The company acquired Bitstamp, a crypto exchange, for $200 million in June of this year. This acquisition of Luxembourg-based Bitstamp is Robinhood’s first institutional business, granting it access to Bitstamp’s institutional offerings, including institutional lending, staking, and the white-label solution Bitstamp-as-a-service.