- The U.K.’s Financial Conduct Authority (FCA) has fined Coinbase $4.5M
- The charge is for serving 13,416 high-risk customers, totaling ~$226M
- Coinbase acknowledged the FCA’s findings and is now actively improving its controls
The UK’s Financial Conduct Authority (FCA) has fined Coinbase $4.5 million for serving high-risk customers.
What Were the Violations by Coinbase?
It turns out that CBPL’s servicing of high-risk customers went undetected for two years.
Despite agreeing not to accept new high-risk customers in 2020, CBPL serviced 13,416 customers worth ~£183 million ($226 million).
The FCA said CBPL demonstrated a “lack of due skill, care and diligence in the design, testing, implementation and monitoring” of its financial controls, with “repeated and material breaches” going undiscovered for nearly two years.
Recall that this violated the regulatory framework established back in 2011 under the UK’s electronic money regulations.
What Are the Consequences?
Coinbase admitted the violations and agreed to pay a fine of $4.5 million.
Coinbase has also assured us of the implementation of measures to improve security controls and ensure compliance with regulations and legislation.
“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,” Coinbase said.
Conclusions
Such violations by leading crypto players are unacceptable, as their reputations contribute a major factor to the attitude of the entire crypto industry. Therefore, Coinbase’s promise to rectify the situation looks appropriate, and we will monitor its implementation and updates.
