Coinbase Just Got Fined For Millions
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July 25, 2024 12:52 pm
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A U.K. regulator has fined cryptocurrency exchange Coinbase for $4.5 million.
The Financial Conduct Authority fined Coinbase for serving high-risk customers.
Therese Chambers, joint executive director of Enforcement and Market Oversight at the FCA, stated, “The money laundering risks associated with crypto are obvious, and firms must take them seriously.”
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“Firms like CBPL that enable crypto trading need to have strong financial crime controls. CBPL’s controls had significant weaknesses and the FCA told it so, which is why the requirements were needed. CPBL, however, repeatedly breached those requirements,” added Chambers.
Coinbase's U.K. arm fined $4.5M by British regulators for onboarding 13,416 "high-risk customers," leading to $226M in transactions, violating a voluntary agreement with the FCA. pic.twitter.com/AWewAxfsD9
— TFTC (@TFTC21) July 25, 2024
A unit of Coinbase was fined £3.5 million by the UK for offering cryptoasset trading services to high risk customers https://t.co/zMs7oIHL3K
— Bloomberg Markets (@markets) July 25, 2024
Per Pymnts:
Coinbase has been fined $4.5 million by a U.K. regulator for serving “high-risk” customers.
The fine, announced Thursday (July 25) by the Financial Conduct Authority (FCA), was levied against a subsidiary of the cryptocurrency exchange, CB Payments Limited (CBPL), which the FCA says repeatedly violated a requirement preventing the company from doing business with high-risk clients.
“The money laundering risks associated with crypto are obvious and firms must take them seriously,” Therese Chambers, joint executive director of Enforcement and Market Oversight at the FCA, said in a news release.
“Firms like CBPL that enable crypto trading need to have strong financial crime controls. CBPL’s controls had significant weaknesses and the FCA told it so, which is why the requirements were needed. CPBL, however, repeatedly breached those requirements.”
According to the FCA, CPBL agreed not to take on new high-risk customers in 2020, after the regulator expressed concerns about the company’s financial crime control network.
The U.K.’s financial regulator fined an arm of Coinbase, saying the unit had enabled crypto trading by risky clients totaling hundreds of millions of dollars https://t.co/SoXQpWjxiV
— WSJ Markets (@WSJmarkets) July 25, 2024
Per Coin Block:
CB Payments Limited, a part of Coinbase Group, has been fined just over 3.5 million British pounds ($4.5 million) by the Financial Conduct Authority for “repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers.”
“Despite the restrictions in place, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers,” the FCA said in a press release.
“Approximately 31 per cent of these customers deposited around USD $24.9 million,” it added, noting: “These funds were used to make withdrawals and then execute multiple cryptoasset transactions via other Coinbase Group entities, totaling approximately USD $226 million.”
The FCA claims CBPL lacked “due skill, care and diligence in the design, testing, implementation and monitoring of the controls put in place” to effectively meet the voluntary requirement.
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