Coinbase’s UK entity, CB Payments Limited (CBPL), has been fined £3.5 million by the UK’s Financial Conduct Authority (FCA) for failing to comply with financial crime regulations. This marks the FCA’s first enforcement action under the Electronic Money Regulations 2011 against a cryptocurrency company. The fine stems from CBPL’s failure to adhere to an agreement with the FCA, established in October 2020, which restricted the onboarding of high-risk customers. Despite this agreement, CBPL onboarded 13,416 high-risk customers, facilitating significant transactions that raised concerns about money laundering.
The FCA criticized CBPL for lacking the necessary skill, care, and diligence in meeting regulatory standards, noting that around 31% of these customers deposited $24.9 million, which was then used for withdrawals and crypto transactions totaling $226 million through other Coinbase entities. In response, CBPL has acknowledged the FCA’s findings and is working to strengthen its compliance controls to prevent future violations.
This action by the FCA signals a broader intent to enforce stricter compliance within the cryptocurrency sector, potentially prompting other firms in the UK to reassess their own compliance measures to avoid similar penalties. The fine underscores the growing regulatory scrutiny on cryptocurrency companies and the importance of robust financial crime controls in the industry.
Source: msn.com
