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Double Bad News for Crypto

FILE: Illustration shows representation of cryptocurrency Bitcoin, Ethereum and Dash plunging into water. Taken 5.23.2022
FILE: Illustration shows representation of cryptocurrency Bitcoin, Ethereum and Dash plunging into water. Taken 5.23.2022

U.S. crypto firm Nomad has been hit by a $190 million theft, blockchain researchers said on Tuesday, while New York State's financial regulator has fined the crypto arm of Robinhood Markets Inc $30 million for alleged violations of anti-money-laundering, cybersecurity and consumer protection rules.

The cryptocurrency markets got two pieces of bad news Tuesday, with one of them involving a sizeable theft. The other, a big fine.

Nomad, a U.S. based crypto firm, said it was "aware of the incident" and was currently investigating, without giving further details or the value of the theft.

However, crypto analytics firm PeckShield told Reuters $190 million worth of users' cryptocurrencies were stolen, including ether and the stablecoin USDC. Other blockchain researchers put the figure at over $150 million.

San Francisco-based Nomad did not immediately respond to a request for comment.

Nomad described itself as a "security first" business which would keep users' funds safe.

Meanwhile, the New York State Department of Financial Services (NYDFS) said on Tuesday that it has fined Robinhood Crypto $30 million, saying it did not devote sufficient resources to address compliance and cybersecurity risks.

As part of the settlement, Robinhood Crypto would also be required to retain an independent consultant to evaluate its compliance practices, the NYDFS said.

Addressing the fine imposed against the firm, Cheryl Crumpton, associate general counsel at Robinhood said on Tuesday "We are pleased the settlement in principle reached last year and previously disclosed in our public filings is now final."

The company has made "significant progress" in building its legal, compliance and cybersecurity programs, Crumpton added.

The online trading app has been at the center of several regulatory probes, including those sparked by last year's frenzy in meme stocks.

As for Robinhood Markets overall, the firm said on Tuesday it is laying off about 23% of its employees, sending its shares down more than 3% in extended trading.

Robinhood had already slashed 9% of its workforce in April.

The crypto world has been repeatedly hit by massive thefts, with a few clicks emptying out crypto "wallets" recorded on "blockchains" which are a form of ledger.

In June, U.S. crypto firm Harmony said that thieves stole around $100 million worth of tokens from its Horizon bridge product.

In March, hackers stole around $615 million worth of cryptocurrency from Ronin Bridge, used to transfer crypto in and out of the game Axie Infinity. The United States linked North Korean hackers to the theft.