{"id":351894,"date":"2024-07-25T15:54:35","date_gmt":"2024-07-25T10:24:35","guid":{"rendered":"https:\/\/dripp.zone\/news\/coinbase-uk-arm-faces-4-5m-fine-for-onboarding-high-risk-customers-crypto-news\/"},"modified":"2024-07-25T16:23:15","modified_gmt":"2024-07-25T10:53:15","slug":"coinbase-uk-arm-faces-4-5m-fine-for-onboarding-high-risk-customers-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/coinbase-uk-arm-faces-4-5m-fine-for-onboarding-high-risk-customers-crypto-news\/","title":{"rendered":"Coinbase UK Arm Faces $4.5M Fine For Onboarding High-Risk Customers – Crypto News"},"content":{"rendered":"

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The United Kingdom regulators have imposed a $4.5 million (\u00a33.5 million) fine on Coinbase\u2019s UK arm, CB Payments Limited (CBPL). The penalty concerns the breach of a voluntary agreement designed to prevent the onboarding of high-risk customers. The U.K.\u2019s Financial Conduct Authority (FCA) announced the fine on Thursday, citing significant weaknesses in CBPL\u2019s control mechanisms.<\/p>\n

Coinbase UK Arm Faces Major Penalty<\/h2>\n

Earlier, in October 2020, Coinbase\u2019s UK branch, CBPL, agreed to a voluntary arrangement with the Financial Conduct Authority (FCA). This arrangement restricted CBPL from accepting new customers identified as \u201chigh-risk\u201d by the regulator. Moreover, it also barred the company from providing services to these high-risk individuals.<\/p>\n

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The purpose of this agreement was to reduce the risk of money laundering and to maintain the integrity of the market. It aimed at preventing potentially illegal activities on the CBPL platform. However, despite these measures, the FCA found that CBPL had onboarded and served 13,416 \u201chigh-risk customers.\u201d<\/p>\n

Furthermore Therese Chambers, FCA\u2019s joint executive director of enforcement and market oversight, vehemently criticized Coinbase\u2019s CBPL for its shortcomings. \u201cCBPL\u2019s controls had major weaknesses, and the FCA had already pointed this out, which led to the implementation of these requirements. Nevertheless, CBPL continually violated these requirements,\u201d Chambers remarked.<\/p>\n

In addition, she highlighted that the poor compliance raised the risk of criminal activities, including money laundering, within CBPL. As a consequence of these violations, the FCA imposed a \u00a33.5 million ($4.5 million) fine on CBPL.<\/p>\n

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Also Read:\u00a0Coinbase Sells User Bitcoin Holdings Due To Inactivity But There\u2019s A Catch<\/a><\/strong><\/p>\n

CBPL Responds To Regulators<\/h2>\n

The regulator emphasized that it would not tolerate such negligence, which threatens the integrity of financial markets. The fine is intended to send a strong message to other financial institutions about the necessity of robust compliance systems and adherence to regulatory standards.<\/p>\n

In response, Coinbase acknowledged the FCA\u2019s findings and reaffirmed its commitment to regulatory compliance. \u201cCBPL continues to actively enhance its control systems to meet regulatory requirements. The FCA also recognized CBPL\u2019s cooperation in its investigation,\u201d the exchange stated, according to a CNBC report.<\/p>\n

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CBPL clarified that it had \u201cunintentionally onboarded\u201d some high-risk customers between October 30, 2020, and October 1, 2023. These customers accounted for just 0.34% of the total new customers signed up during this period. Additionally, Coinbase stressed that it takes the FCA\u2019s findings and overall regulatory compliance very seriously.<\/p>\n

Hence, the exchange is working to improve its control mechanisms to avoid future breaches. The news of the fine had an immediate impact on the crypto exchange\u2019s stock. The COIN stock was down 1.94% at $240.31 in U.S. premarket trading on Thursday, July 25.<\/p>\n

Also Read:\u00a0BlackRock Ethereum ETF Wallet Gets 76,669 ETH From Coinbase<\/a><\/strong><\/p>\n

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