The UK’s Financial Conduct Authority (FCA) has fined a UK subsidiary of crypto exchange Coinbase for breaching financial crimes requirements.
The FCA slapped the Coinbase-affiliated firm with a $4.5 million fine for failing to comply with a voluntary agreement meant to stop the onboarding of users deemed high-risk to the platform.
Coinbase UK Subsidiary Fined $4.5 Million for Financial Crimes Breach
The Coinbase UK subsidiary, CB Payments Limited (CBL), reportedly signed an agreement with the FCA in 2020. The deal sought to minimize the use of the CBL platform for criminal activities such as money laundering.
The FCA revealed that CBL had violated this agreement by onboarding 13,416 users considered high-risk. Therese Chambers, joint executive director of enforcement and market oversight at the FCA, slammed CBL’s management for these violations.
Chambers said in a statement on Thursday, July 25, “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. This increased the risk that criminals could use CBPL to launder the proceeds of crime. We will not tolerate such laxity, which jeopardizes the integrity of our markets.”
Reaction from Coinbase
Reacting to the FCA’s announcement, Coinbase affirmed its commitment to regulatory compliance. The exchange said in a statement, “We welcome regulation and are dedicated to working proactively and closely with the most sophisticated financial regulators in the world, including the FCA, to ensure we offer the most compliant, trusted, and secure platform for our customers.”
A message to crypto service providers
Most crypto users consider the FCA’s fine on CBL a message to crypto service providers. The regulator seems to urge crypto firms to take financial crime management seriously. Firms that fail to comply with the FCA’s policies risk facing penalties or operating limits.
Interestingly, the FCA noted that CBPL “qualified” for a 30% discount on the fine following its agreement to resolve the case.
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