Crypto firm Coinbase fined millions for serving high-risk customers

euronews.com:

The FCA, the Financial Conduct Authority, has revealed it has fined a subsidiary of Coinbase (CBPL) for offering services to high-risk customers.

The UK branch of the crypto trading platform took a hit of £3.5 million (€4.16 million), and global shares were down more than 2% in US pre-market trading.

CBPL entered into a voluntary deal with the FCA in October 2020, agreeing that it would not accept new users that the regulator considered high-risk.

This deal followed "significant engagement" with the regulator relating to concerns about "the effectiveness of CBPL's financial crime control framework," said the FCA.

Despite the agreement, the crypto firm took on or served 13,416 high-risk customers.

Approximately 31% of these individuals deposited around $24.9 million (€22.9 million), said the UK watchdog.

These funds were used to make withdrawals and then execute multiple cryptoasset transactions via other Coinbase Group entities, totalling approximately USD $226 million (€208.30 million).

"The breaches were the result of CBPL's lack of due skill, care and diligence in the design, testing, implementation and monitoring of the controls put in place to ensure that the VREQ [voluntary agreement] was effective," said the FCA in a statement.

Therese Chambers, joint executive Director of Enforcement and Market Oversight at the FCA, added that the breaches of the agreement "increased the risk that criminals could use CBPL to launder the proceeds of crime".

"We will not tolerate such laxity, which jeopardises the integrity of our markets," she continued.

Coinbase confirmed in a statement that CBPL had "unintentionally onboarded some customers between October 30, 2020, and October 1, 2023 (representing 0.34% of customers on-boarded) who were