The $4.5 million fine could signal increased scrutiny for crypto exchanges in the region.
Coinbase’s UK branch has been fined $4.5 million by a British regulator for violating a voluntary agreement related to user onboarding.
In 2020, CB Payments Limited (CBPL), part of the Coinbase Group, entered an agreement with Britain’s Financial Conduct Authority (FCA) to prevent onboarding customers considered ‘high risk’ by the regulator.
Despite this, CBPL reportedly onboarded 13,416 customers deemed high-risk by the FCA and offered cryptocurrency services to them, violating the agreement. The FCA fined Coinbase Group’s CBPL £3.5 million ($4.5 million) for these repeated breaches.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, highlighted the risks in a July 25 statement:
“CBPL’s controls had significant weaknesses, and the FCA pointed them out, which is why the requirements were necessary. However, CPBL repeatedly breached those requirements, increasing the risk that criminals could use CBPL to launder the proceeds of crime. We will not tolerate such laxity, which jeopardizes the integrity of our markets.”
This decision by the British regulator may lead to more scrutiny for other cryptocurrency exchanges in the region, possibly driving platforms to seek more crypto–friendly regulatory environments.
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