UK Financial Regulator Slaps Coinbase Subsidiary With $4,500,000 Fine for Onboarding High-Risk Customers

UK’s Financial Conduct Authority (FCA) says it imposed a fine of £3,503,546 or about $4.5 million on CB Payments Limited (CBPL) for violating the voluntary agreement (VREQ) that the firm and the regulator entered into in late 2020.

CBPL, a subsidiary of crypto exchange Coinbase, provides e-money and payment services to its customers, but the company is not registered with the FCA to conduct crypto asset transactions in the UK.

The voluntary agreement includes restrictions aimed at preventing CBPL from taking on new high-risk customers while it addresses regulatory concerns over its financial crime control framework.

In a statement, FCA says CBPL onboarded and provided e-money services to 13,416 high-risk customers.

“The breaches were the result of CBPL’s lack of due skill, care and diligence in the design, testing, implementation and monitoring of the controls put in place to ensure that the VREQ was effective. This included failing to consider all of the various ways in which customers might be onboarded when designing the controls.”

CBPL has agreed to pay the fine. In a statement, Coinbase says it remains committed to high standards of regulatory compliance.

“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.”

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