FCA Fines Coinbase’s CB Payments Ltd (CBPL)
Key Points:
- Fine Imposed:
- Amount: £3,503,546 million.
- Reason: Alleged breaches of a requirement preventing CBPL from offering services to high-risk customers.
- Background:
- CBPL: A UK-based subsidiary of Coinbase, authorized as an e-money institution by the FCA since 2017.
- Function: Acts as a gateway for customers to trade cryptoassets via other entities within the Coinbase Group but does not undertake cryptoasset transactions itself.
- FCA’s Findings:
- In 2020, the FCA identified “significant weaknesses and gaps” in CBPL’s financial crime control framework.
- CBPL agreed to a voluntary requirement (VREQ) to prevent onboarding high-risk customers until the issues were resolved.
- Despite this, CBPL onboarded and/or provided services to 13,416 high-risk customers, violating the VREQ.
- Financial Impact:
- Around 31% of these customers deposited approximately $24.9 million, which was used for transactions totaling around $226 million.
- FCA’s Response:
- The FCA considers CBPL’s failings as serious and persistent, significantly increasing the risk of facilitating financial crime.
- CBPL agreed to resolve the matter, qualifying for a 30% discount on the fine, and cooperated with the investigation.
- Statements:
- FCA: Emphasized the importance of strong financial crime controls in crypto trading firms and criticized CBPL’s repeated breaches of requirements.
- Coinbase: Acknowledged the findings, emphasized its commitment to regulatory compliance, and stated that CBPL continues to enhance its controls to meet regulatory obligations.
