Robinhoods Crypto Unit Hires New Grayscale Compliance Officer

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The cryptocurrency unit of popular trading platform Robinhood Markets Inc. has hired a new compliance officer, a move that comes as the company faces regulatory scrutiny.

Benjamin Melnicki joined Robinhood Crypto LLC this week, a Robinhood spokesperson said.

Mr. Melnicki was until recently chief compliance officer for digital currency asset management firm Grayscale Investments LLC, a position he had held since January, according to his LinkedIn profile. Prior to Grayscale, he worked as a regulatory advisor at cryptocurrency startup Ripple Labs Inc. and Blockchain.com, a provider of cryptocurrency services to retail and institutional clients, each position lasting approximately one. year. Previously, he was the Director of Swap Dealer Compliance at Bank of America Corp.

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His appointment follows the departure of Scott Hershorin, who left Robinhood in June. Mr. Hershorin is chief compliance officer and vice president of operations at Dragonfly Capital Partners, a San Francisco-based venture capital firm that invests in crypto assets, according to the Dragonflys website.

A spokeswoman for Grayscale confirmed Mr Melnickis’ departure and said the company was looking for a successor.

Mr. Melnicki did not immediately respond to an email seeking comment

Robinhood, which went public in July, said this month that its crypto business has struck a deal with the New York State Department of Financial Services. The company expects to pay a fine of $ 30 million related to the claims by regulators and obtain a monitor, according to its quarterly report filed with the U.S. Securities and Exchange Commission in August.

The New York state regulator alleged that Robinhood Crypto violated requirements of New York’s anti-money laundering and banking law, as well as cybersecurity and virtual currency requirements, according to the filing. These allegations include the failure to maintain and certify a compliant anti-money laundering program; deficiencies in Robinhood Cryptos’ policies and procedures regarding risk assessment; and the lack of an adequate incident response and business continuity plan, depending on the file.

The crypto unit also received a subpoena in April from the California Attorney General’s Office that requested documents and answers to questions about its trading platform, its business and operations, and the applications of the California commodity regulations, according to the SEC filing. Robinhood has said he is cooperating with the investigation.

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