Brian Armstrong’s Coinbase has been fined $50 million by the New York financial watchdog for the violation of anti-money laundering laws, as per Wednesday’s press release.
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Coinbase Agrees to $100 Million Settlement With New York Regulators Over Failed Compliance Program
According to the release on January 4, 2023, the New York State Department of Financial Services (NYDFS) discovered that Coinbase, the US largest cryptocurrency exchange failed to carry out sufficient background checks on users who were allowed to open accounts by Coinbase on its platform. These policies are however violating the anti-money laundering laws in the US.
In addition to the fine, Coinbase will as well be required to invest $50 million within the next 2 years towards making sure it has a strong compliance program.
“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth,” wrote Superintendent of Financial Services Adrienne A. Harris in a press release. “That failure exposed the Coinbase platform to potential criminal activity requiring the Department to take immediate action including the installation of an Independent Monitor.”
Meanwhile, Coinbase had been granted virtual assets service provider and money transmitting business in New York since 2017, following the NYDFS discovery of the flaws in the Coinbase Know Your Customer (KYC) and transaction monitoring policies, the New York regulators were spurred to introduce an independent monitor early last year to fix the issues by working with Coinbase.
“Today Coinbase and NYDFS have come to an agreement to settle a NYDFS investigation, disclosed in our 2021 annual 10K filing, into our historical compliance program,” wrote Paul Grewal, Coinbase’s Chief Legal Officer told CoinDesk.
“Coinbase has taken substantial measures to address these historical shortcomings and remains committed to being a leader and role model in the crypto space, including partnering with regulators when it comes to compliance.”
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So how much has Citibank paid for knowingly laundering cartel money for decades? Or Wells Fargo for intentionally defrauding it’s own clients with their multiple account scam?