Saturday, January 7, 2023

Coinbase to Pay $50 Million Fine to New York Regulators

Coinbase Global Inc., a U.S. cryptocurrency exchange, settled with New York state regulators for $100 million after an investigation into the exchange's compliance with requirements to prevent money laundering. 1 The regulators fined CoinBase $50 million after they said that as far back as 2018, the firm allowed customers to open accounts without conducting sufficient background checks. CoinBase must also spend $50 million to boost compliance efforts to stop potential criminals from using the exchange. Compliance Issues Date Back to 2018 Regulators state first detected the compliance problems at Coinbase in 2020, after the exchange obtained a New York license in 2017. According to their findings, the exchange's anti-money-laundering controls had problems dating back to 2018. “We found failures that really warranted putting in place an independent monitor rather than wait for a settlement,” said Adrienne A. Harris, New York state superintendent of financial services. “We have been very outspoken about illicit financing concerns in the space. It is why our framework holds crypto companies to the same standard as for banks.” 3 According to the settlement, Coinbase is moving too slowly in reviewing older accounts for suspicious features. It will require the exchange to work with a monitor for at least another year to improve its compliance procedures. New York regulators didn't identify the monitor. Agencies Warn Risks of Crypto Federal prosecutors have been busy in recent months with probes of several cryptocurrency exchanges and have also examined whether overseas firms are properly screening customers' backgrounds. Yesterday, regulators warned banks that they should know about risks tied to cryptocurrency assets, including legal uncertainties and misleading disclosures, two months after the collapse of FTX sent shockwaves through the industry.

No comments:

Post a Comment