Coinbase to Pay $50 Million Fine to New York Regulators

investopedia.com:

Coinbase Global Inc., a U.S. cryptocurrency exchange, settled with New York state regulators for $100 million after an investigation into the exchange's compliance with requirements to prevent money laundering.

The regulators fined CoinBase $50 million after they said that as far back as 2018, the firm allowed customers to open accounts without conducting sufficient background checks. CoinBase must also spend $50 million to boost compliance efforts to stop potential criminals from using the exchange.

" Coinbase has taken substantial measures to address these historical shortcomings," Paul Grewal, Coinbase's chief legal officer, told CoinDesk in an email. He said the firm is committed to being a role model and will work with regulators on compliance issues."

Regulators state first detected the compliance problems at Coinbase in 2020, after the exchange obtained a New York license in 2017. According to their findings, the exchange's anti-money-laundering controls had problems dating back to 2018.

“We found failures that really warranted putting in place an independent monitor rather than wait for a settlement,” said Adrienne A. Harris, New York state superintendent of financial services. “We have been very outspoken about illicit financing concerns in the space. It is why our framework holds crypto companies to the same standard as for banks.”

According to the settlement, Coinbase is moving too slowly in reviewing older accounts for suspicious features. It will require the exchange to work with a monitor for at least another year to improve its compliance procedures. New York regulators didn't identify the monitor.

Federal prosecutors have been busy in recent months with probes of several cryptocurrency exchanges and have