Your Freedom of Information Law ("FOIL") Request FOIL-2023-095358-021587 - Robinhood BitLicense Records Appeal - NY-DFS

[Gunnar Larson]

Dear Ms. Mazza:

This is a friendly reminder xNY.io - Bank.org will not rest until we
conclude the BitLicense RICO concern.

Can we please receive an update on our dignified Robinhood records request
appeal?

Have a great day.

Thank you,

Gunnar
--
Gunnar Larson
xNY.io - Bank.org
917-580-8053

On Tue, Feb 27, 2024, 6:43 AM Gunnar Larson <g at xny.io> wrote:

> Ms. Mazza:
>
> The five day deadline has passed.
>
> This is very important particular to xNY.io - Bank.org's concern of a
> crypto RICO derrived out of the BitLicense.
>
> Ms. Mazza, when can xNY.io - Bank.org expect a response on the Robinhood
> records? NY-DFS' records response to Coinbase was extremely helpful.
>
> Have a great day.
>
> Thank you,
>
> Gunnar
> --
> Gunnar Larson
>
> xNY.io | Bank.org
>
> MSc - Digital Currency
> MBA - Entrepreneurship and Innovation (ip)
>
> G at xNY.io
> +1-917-580-8053
> New York, New York 10001
>
>
> On Wed, Feb 21, 2024, 2:21 PM Gunnar Larson <g at xny.io> wrote:
>
>> 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 at 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 at dfs.ny.gov.
>> Very truly yours,
>> Stephanie Mazza
>> Associate Attorney
>> ---------- Forwarded message ---------
>> From: <Stephanie.Mazza at dfs.ny.gov>
>> Date: Wed, Feb 21, 2024, 1:26 PM
>> Subject: Your Freedom of Information Law ("FOIL") Request
>> FOIL-2023-095358-021587
>> To: <G at xny.io>
>>
>>
>> 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
>>
>
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