United Kingdom regulators have slammed Coinbase with a fine of £3.5 million, approximately $4.5 million. The fine is connected to accusations of offering crypto asset trading services to high-risk customers.
CBPL Bridge Voluntary Agreement With FCA
Back in October 2020, CB Payments Limited (CBPL), the UK unit of Coinbase exchange, inked a voluntary agreement with the UK Financial Conduct Authority (FCA). Apparently, the payment platform accepted restrictions that prohibit it from onboarding customers that the regulator considers “high-risk.”
On Thursday, the FCA accused CBPL of repeatedly breaking this voluntary agreement by providing services to 13,416 high-risk customers. The regulator discovered that around 31% of these high-risk customers have deposited around $25 million into CBPL.
At a later date, the funds went into transactions via Coinbase Group entities worth around $226 million, according to the FCA. Therese Chambers, the Joint Executive Director of Enforcement and Market Oversight at the FCA, made it clear that CBPL’s controls had some weaknesses which led to the implementation of the agreement in the first place.
CBPL’s inability to keep its end of the agreement increased the risk that criminals could use the platform to launder the proceeds of crime, per Chambers’ argument.
“We will not tolerate such laxity, which jeopardizes the integrity of our markets.”
Coinbase Claims Compliance With Regulators
Coinbase did not admit to committing any offense, instead, the exchange noted that it “unintentionally onboarded” a few customers that FCA classified as high-risk.
“We believe our investment in compliance stands out in the market as one of the highest, and that our customers should feel safe and protected when using our platforms,” CBPL noted.
This comes right after Coinbase filed a lawsuit against the United States Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) for not meeting information requests in confidential crypto cases.
The crypto exchange is keen on getting regulators to perform their responsibilities to crypto firms.
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