Coinbase’s entity in the UK was fined .5 million for breaking an agreement with the Financial Services Authority (FSA). CB Payments Limited (CBPL), the entity, onboarded high-risk customers, possibly allowing crime-related funds to follow into the country’s financial system. “CB Payments Limited (CBPL) has been fined £3,503,546 by the Financial Conduct Authority (FCA) for repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers,” the FSA said in a statement. It added, “The firm entered into a voluntary requirement (the VREQ) in October 2020, which followed significant engagement with the FCA relating to concerns about the effectiveness of CBPL’s financial crime control framework. The VREQ prevented CBPL from taking on new high-risk
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Coinbase’s entity in the UK was fined $4.5 million for breaking an agreement with the Financial Services Authority (FSA). CB Payments Limited (CBPL), the entity, onboarded high-risk customers, possibly allowing crime-related funds to follow into the country’s financial system.
“CB Payments Limited (CBPL) has been fined £3,503,546 by the Financial Conduct Authority (FCA) for repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers,” the FSA said in a statement.
It added, “The firm entered into a voluntary requirement (the VREQ) in October 2020, which followed significant engagement with the FCA relating to concerns about the effectiveness of CBPL’s financial crime control framework. The VREQ prevented CBPL from taking on new high-risk customers while it addressed issues with its framework.”
Despite the restrictions, CBPL took in 13,416 high-risk customers who have conducted transactions worth $226 million thus far. The regulator wanted to send a message to other exchanges in the jurisdiction and put an end to gaps in onboarding processes.
The FCA’s joint executive director of entitlement and market oversight, Therese Chambers, said, “The money laundering risks associated with crypto are obvious and firms must take them seriously. Firms like CBPL that enable crypto trading need to have strong financial crime controls.” She continued, “We will not tolerate such laxity, which jeopardizes the integrity of our markets.”
Coinbase issued its statement in response, “We take the FCA’s findings and our broader regulatory compliance very seriously and CBPL continues to proactively enhance its controls to ensure compliance with its regulatory obligations.”
The firm also mentioned how CBPL operates in the UK with an e-money license, limiting its functionality to “e-money and payment services to customers located in certain jurisdictions.” It clarified that it does not provide crypto transaction services.
The enforcement action against Coinbase stems from the UK’s Electronic Money Regulations 2011. This occurrence is the first time the regulation was used to fine an entity.