Coinbase Fined $50M for Failing to Investigate Suspicious Accounts

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• Coinbase, a U.S-based cryptocurrency exchange, will be paying a fine of $50 million to New York regulators.
• The fine was issued due to Coinbase not properly following up with suspicious activities detected by its internal systems and failing to do a thorough investigation on suspicious accounts.
• The firm is also required to invest another $50 million in upgrading its compliance program.

Coinbase, a U.S-based cryptocurrency exchange, is facing a substantial financial penalty from the New York State Department of Financial Services. This is due to the company’s failure to properly follow anti-money laundering (AML) laws in the region. According to reports, the fine is set at $50 million, and Coinbase will be required to invest another $50 million in its compliance program.

The issue came to light when the regulator conducted a compliance examination as part of the BitLicense issued to Coinbase. The license was granted in 2017, allowing the firm to provide digital currency services in New York. During the examination, it was found that since 2018, the exchange had been lax in following up with suspicious activities detected by its internal systems. This included failing to do a thorough investigation on suspicious accounts. The New York regulator opened a formal investigation in 2021, and determined that Coinbase had 100,000 alerts on suspicious transactions that were not properly investigated.

The $50 million fine will be paid to the New York State Department of Financial Services. Furthermore, Coinbase will invest another $50 million in its compliance program. This will help the firm to better prevent drug traffickers and other criminals from creating an account on the platform. Coinbase has also hired an independent consultant to help the company address the issue.

The hefty fine is a reminder to all crypto exchanges to stay vigilant and ensure they are compliant with all regulations. This is especially important in the U.S, where the government is increasingly taking a close look at the cryptocurrency industry.