FCA has fined prominent cryptocurrency exchange Coinbase’s United Kingdom arm $4.5M for breaching a voluntary agreement related to user onboarding. CB Payments Ltd. (CBPL), is an e-money institution and payments processor tied to United States Coinbase (COIN).
Coinbase in trouble with UK regulators
According to reports, CBPL allegedly onboarded 13,416 customers that the FCA considered high-risk. The entity offered crypto services to them, which is a breach of contract with the FCA. The FCA fined CBPL 3,503,546 pounds.
In 2020, entered into a voluntary agreement with FCA to prevent it from onboarding consumers deemed ‘high risk’ by the regulator.
Despite the restrictions in place, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers. Approximately 31 percent of these customers deposited around USD $24.9 million. These funds were used to make withdrawals and then execute multiple crypto asset transactions via other Coinbase Group entities, totaling approximately USD $226 million.
British FCA
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FCA’s decision could result in more scrutiny of other crypto exchanges in the UK. The process would require these exchanges to abide by FCA or seek more crypto-friendly regulatory global cities.
In Coinbase’s official statement, the entity states, “Coinbase remains committed to high standards of regulatory compliance, and this means partnering with regulators when it comes to compliance and other areas. We are always willing to acknowledge when we fall short and to make improvements – which is what we have done here.”
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