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Coinbase set to pay 100mn.

 

Coinbase is set to pay 100mn

US-listed crypto exchange Coinbase has reached a $100mn deal with New York regulators for anti-money laundering failures, including a backlog of more than 100,000 unreviewed transactions and a reliance on social media profiles to verify customers’ identities.

The New York State Department of Financial Services said yesterday that Coinbase would pay a $50mn fine for weak compliance measures and would spend a further $50mn on a two-year programme to improve its systems.

Despite the efforts of firms to convince policymakers of their credentials, Senator Elizabeth Warren last month doubled down on that message, warning that crypto had become «the preferred tool for terrorists, for ransomware gangs, for drug dealers, and for rogue states that want to launder funds».

The deal comes as regulators ramp up their scrutiny of crypto exchanges following November’s collapse of FTX, once one of the largest crypto groups, and the arrest of its founder, Sam Bank-man-Fried, last month.

Paul Grewal, chief legal officer at Coinbase, said that the company «has taken substantial measures to address these historical shortcomings and remains committed to being a leader and role model in the crypto space».

The regulator said Coinbase’s customer due diligence file from its retail customers historically consisted of «little more than a copy of a photo ID» and that it «did the bare minimum» to verify due diligence information from retail customers, relying on self-reported social media profiles and overlooking information that was «clearly inaccurate, and incomplete».

www.sba.tax

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Comments

  1. April5 January 2023 at 13:27

    Unfortunately, this is the case for every crypto exchange, not just Coinbase. They do not have the manpower to check all transactions so most of them are just scanned.

    ReplyDelete
    Replies
    1. Zack5 January 2023 at 14:55

      When you have underpaid people that have to check up on these things you can't expect much. Pay these people better, demand more of them and check that they do it and hire more people.

      Delete
  2. Alphonso5 January 2023 at 16:17

    Until a clear system is put in place to check the identity of crypto exchangers nothing will be different. Terrorists and crime groups will still use crypto to launder money and so on.

    ReplyDelete
  3. Kyle A.5 January 2023 at 18:42

    This fine is nothing. As for the $50 million they want to invest it all depends on what is done with the money. And it shouldn't take them another 2 years to improve their systems.

    ReplyDelete

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