Coinbase Subsidiary Fined £3.5 Million by FCA for Breaching High-Risk Customer Restrictions
CB Payments Limited, part of the Coinbase Group, has been fined over £3.5 million ($4.5 million) by the Financial Conduct Authority (FCA) for repeatedly violating a mandate that prohibited the firm from providing services to high-risk clients.
The FCA stated in a press release that “despite the restrictions, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers.” It was further disclosed that approximately 31% of these clients deposited around $24.9 million. These funds were subsequently used for withdrawals and multiple cryptoasset transactions through other entities within the Coinbase Group, amounting to approximately $226 million.
According to the FCA, CBPL failed to demonstrate “due skill, care, and diligence in the design, testing, implementation, and monitoring of the controls required” to comply with the voluntary mandate effectively.
Therese Chambers, the FCA’s Joint Executive Director of Enforcement and Market Oversight, emphasized the obvious money laundering risks associated with cryptocurrencies and stressed that firms must take these risks seriously.
This enforcement action marks the first time the FCA has exercised its authority under the Electronic Money Regulations 2011.
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