The UK Financial Conduct Authority fines Coinbase $4.5 million for regulatory violations
The American cryptocurrency exchange Coinbase has been fined $4.5 million by the UK Financial Conduct Authority (FCA) for repeatedly breaching regulatory requirements. According to the FCA, the company provided services to clients categorized as «high risk» without adhering to the necessary rules.
CB Payments Limited (CBPL), a subsidiary of Coinbase Group, was found to have facilitated cryptocurrency trading for high-risk users through other entities within the company, despite a prior agreement with the FCA to limit these clients. More than 13,400 high-risk users were onboarded by CBPL, with approximately $25 million deposited into their accounts, representing 30% of the total.
The FCA attributed the violations to CBPL’s failure to employ adequate controls and oversight measures, as well as a lack of diligence in monitoring these activities. The regulator highlighted that Coinbase’s operational deficiencies persisted for nearly two years before being identified.
This penalty serves as a reminder of the importance of adhering to regulatory standards, especially when dealing with high-risk customers within the financial sector, including cryptocurrency exchanges.
