The crypto exchange will pay a $50 million fine for violating anti-money laundering laws. Coinbase will also have to invest the same amount to strengthen its compliance program.
Coinbase has agreed to pay a $50 million fine for letting customers open accounts without conducting sufficient checks, violating anti-money laundering laws, the NY Times reported on Wednesday.
The New York State Department of Financial Services detected compliance issues at Coinbase during a routine examination in 2020. At the end of 2021, the platform had a backlog of more than 100,000 alerts about “potential suspicious customer transactions” that were not properly reviewed.
Regulators also found that the company was performing only “the most rudimentary of checks” on KYC (Know your customer).
In addition to the fine, they are requiring the publicly traded California exchange to invest $50 million to improve the effectiveness of its compliance program.
Earlier this fall, the U.S. Treasury Department fined crypto exchange Bittrex $29 million for letting users from sanctioned countries trade assets on its platform.