Monat: September 2022

The crypto division of the popular trading app Robinhood has been fined $30 million by the New York State Department of Finance Services for allegedly violating cybersecurity regulations and anti-money laundering laws.

The New York State Department of Financial Services accused the trading app company of failing to use proper resources to stop illicit trading activities on the platform.

A press release on this matter notes:

“All of these deficiencies resulted from what the department found were significant shortcomings in the management and oversight of RHC’s compliance programs, including a failure to foster and maintain an adequate culture of compliance. The department also discovered that adequate resources were not devoted to RHC’s compliance programs, particularly as it grew, which exacerbated these issues.”

Robinhood is now being investigated further and will be required by the department to hire the services of an independent monetary consultant who will regularly evaluate its compliance efforts and enforce remedies when necessary.

Failing to hire and train staff

In addition to failing to prevent anti-money laundering activities, Robinhood was also accused of failing to hire and train its staff to prevent illicit financial behaviour. The department said that Robinhood did not take note of the apparent trading risks and therefore didn’t take the necessary actions to prevent illicit behaviour.

In its defence, Robinhood through its associate general counsel, Chery Crumpton said in an interview:

“We have made significant progress building industry-leading legal, compliance, and cybersecurity programs. We will continue to prioritize this work to best serve our customers. We remain proud to offer a more accessible, lower-cost platform to buy and sell crypto and are excited to continue to grow our business in a responsible manner with new products and services that our customers want.”

The post Robinhood’s crypto division slapped with a $30 million fine appeared first on CoinJournal.

Babylon Finance, the protocol for DeFi asset management, has issued a statement saying that it shall shut down its services on November 15.

This comes after the firm failed to recover from the $80 million Rari/FEI hack that took place in April this year.

Babylon Finance is shutting down

– Details on the claim process will be shared by the end of this week
– Withdraw your funds before Nov 15thhttps://t.co/dICvgxpDUF

— Babylon Finance (@BabylonFinance) August 31, 2022

The Rari/FEI hack

Prior to the Rari/FEI hack, Babylon Finance was operating perfectly and it had established a top 10 lending pool on Rari, a protocol that allows users to supply and borrow any asset from its Fuse pools to generate yield.

Rari users can create pools with a selection of Ethereum-based digital assets, like Babylon Finance’s native token, BABL, and other users can contribute money to those pools to receive rewards. At its peak, Babylon Finance held $30 million worth of different cryptocurrencies on Rari and was one of the top lending pools on Rari. $10 million worth of the assets were supplied by users.

The Rari/FEI hack caused the protocol $3.4 million and in the following two days, customers had withdrawn 75% of the TVL.

Following the exploit, Babylon’s $10 million loan market on Rari, Fuse, was suspended because BABL could no longer be used as security in borrowing funds on Rari.

The Babylon Finance token, BABL

Following the news, the price of the BABL token has dropped by over 91% in the last 24 hours and it is currently trading at $0.4563 according to Coinnmarketcap.

According to a press release by Babylon Finance:

“Since the token supply is finite, non-inflationary, and only 10% remains in the treasury, the fall has eliminated any chance of further fundraising initiatives.”

The Babylon Finance team has said that starting on September 6, the firm would combine all its treasury holdings and distribute them to BABL holders. In addition members of Babylon Finance must withdraw their money before November 15.

The post Babylon Finance to shut down on November 15: BABL price falls by 91% appeared first on CoinJournal.