---------- Forwarded message ---------
From: Gunnar Larson
Date: Wed, Feb 21, 2024, 2:21 PM
Subject: Fwd: Your Freedom of Information Law ("FOIL") Request
FOIL-2023-095358-021587 - Robinhood BitLicense Records Appeal - NY-DFS
To: Mazza, Stephanie (DFS)
Cc: Reader, Shaun , , Harris,
Adrienne A (DFS) , <
Recordsaccessofficer@dfs.ny.gov>,
In accordance with Public Officers Law § 89(4), xNY.io - Bank.org elects to
appeal this determination to withhold the Robinhood BitLicense Records.
Turn this matter as we will, any side whatsoever appears to require
obstruction of justice.
We further demand NY-DFS send xNY.io - Bank.org an update on the
aforementioned appeal within five (5) business days.
Reserving all rights, xNY.io - Bank.org is seeking relevant relief in
California on Robinhood.
Warm regards,
Gunnar
----
SENT VIA EMAIL
Email: G@xny.io
February 21, 2024
Mr. Gunnar Larson
xNY.io – Bank.org
406 West 25th Street
New York, NY 10001
Re: Freedom of Information Law (“FOIL”) Tracking No. 2023-095358
Dear Mr. Larson,
I write in response to the FOIL request that you submitted to the New York
State Department of Financial Services
(“Department”), which has been assigned the above-referenced tracking
number and reads as follows:
Dear Madam or Sir: On August 2, 2022 the Superintendent of Financial
Services Adrienne A. Harris
announced that Robinhood Crypto, LLC (“RHC”) would pay a $30 million
penalty to New York State
for significant failures in the areas of bank secrecy act/anti-money
laundering (“BSA/AML”)
obligations and cybersecurity that resulted in violations of the
Department’s Virtual Currency
Regulation (23 NYCRR Part 200), Money Transmitter Regulation (3 NYCRR Part
417), Transaction
Monitoring Regulation (23 NYCRR Part 504), and Cybersecurity Regulation (23
NYCRR Part 500).
xNY.io - Bank.org would like to
1. receive any and all records related to NY-DFS' investigation of
Robinhood Crypto. Including (but
not limited to) records concerning the bespoke Supervisory Agreement
Robinhood Crypto has with
the Department of Financial Services mentioned here:
https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202208021.
2. In addition, xNY.io - Bank.org seeks any and all records concerning New
York's approach to
Robinhood Crypto and Goldman Sachs compliance programs mandated by the
United States
Department of Justice, Criminal Division, Fraud Section and Money
Laundering and Asset
Recovery Section mentioned here:
https://drive.google.com/file/d/1Yx88RMoeLyyfbNK0RtPl4r-
m8N21_1Sp/view?usp=drivesdk.
3. Finally, xNY.io - Bank.org seeks records concerning New York's
regulatory approval of
Robinhood Crypto engaging a fine of $30M to implement heightened controls
and additional
procedures and policies relating to electronic surveillance and
investigation, due diligence on
transactions or clients and the use of third-party intermediaries across
business units; and enhancing
anti-corruption training for all management and relevant employees.
To the extent the request is reasonably described, the Department construes
the request as seeking the records,
correspondence, and work product exchanged between Robinhood and the
Department in accordance with the Department’s
August 1, 2022 Consent Order (“responsive records”).
The records that you seek relate to an ongoing Department investigation.
Accordingly, your request is denied
pursuant to Public Officers Law § 87(2)(e)(i) (the “law enforcement
exemption”), which excepts from disclosure records
that are compiled for law enforcement purposes and that, if disclosed,
would interfere with law enforcement investigations.
The purpose behind the law enforcement exemption is to protect an agency’s
investigative process from being compromised
by revealing the scope and nature of an agency's investigation before an
investigation is complete. See Matter of Pittari v.
Pirro, 258 A.D.2d 202 (2d Dep’t 1999). It also bears noting that the law
enforcement exemption applies to both civil and
criminal investigatory files. See Madeiros v. Dep’t of Educ., 30 N.Y.3d 67
(2017). In this instance, releasing the requested
records would interfere with the Department’s investigative process. Thus,
the Department is not disclosing the records that
you request pursuant to Public Officers Law § 87(2)(e)(i).
Moreover, in addition to withholding the responsive records pursuant to
Public Officers Law § 87(2)(e)(i), the
Department also is withholding the responsive records pursuant to Public
Officers Law § 87(2)(a), which specifically
exempts from disclosure records exempted by a state or federal statute. The
applicable statutory provision is N.Y. Banking
Law (“Banking Law”) § 36(10), which states, in pertinent part, that reports
of examinations and investigations and
correspondence and memoranda concerning or arising out of such examinations
and investigations are confidential and shall
not be made public. The statute fosters open communication between the
Department and its regulated institutions, a
necessity for effective regulation of financial institutions, by ensuring
that records transmitted to the Department in
connection with its supervision of a financial institution are protected
from disclosure.
The responsive records that were transmitted between Robinhood and the
Department in connection with the
Department’s supervision of Robinhood as a licensed money transmitter
pursuant to New York Banking Law, constitute
correspondence and reports concerning and arising out of an investigation
and are, therefore, required to be kept confidential
and exempt from disclosure under Banking Law § 36(10). The expectation that
records transmitted to the Department will
remain confidential is essential to encouraging candor and open
communications between the Department, its regulated
entities, and the entities undergoing regulatory review that submit such
records. Release of such sensitive records, albeit
responsive records, may have a chilling effect on the willingness of
regulated entities to share information and cooperate
with supervisors to resolve issues, and thus confidentiality is critical to
the Department’s ability to perform its regulatory
mandate and purpose. Accordingly, the exemption set forth in Public
Officers Law § 87(2)(a) via Banking Law § 36(10)
covers the responsive records.
In accordance with Public Officers Law § 89(4), you may appeal this
determination to withhold the records within
30 days by sending an email to FOIL.Appeals@dfs.ny.gov.
Very truly yours,
Stephanie Mazza
Associate Attorney
---------- Forwarded message ---------
From:
Date: Wed, Feb 21, 2024, 1:26 PM
Subject: Your Freedom of Information Law ("FOIL") Request
FOIL-2023-095358-021587
To:
Dear Mr. Larson:
Attached please find the Department's determination regarding the
aforementioned FOIL request. Because your request has been answered, your
request is now closed.
Tracking Number:FOIL-2023-095358-021587
