{"id":85077,"date":"2024-07-25T07:18:33","date_gmt":"2024-07-25T11:18:33","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=85077"},"modified":"2024-07-25T07:19:45","modified_gmt":"2024-07-25T11:19:45","slug":"coinbase-uk-hit-with-4-5m-fine-for-high-risk-customer-onboarding","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/coinbase-uk-hit-with-4-5m-fine-for-high-risk-customer-onboarding\/","title":{"rendered":"Coinbase UK Hit with $4.5M Fine for High-Risk Customer Onboarding"},"content":{"rendered":"\n

Coinbase's UK subsidiary, CBPL, has been fined $4.5 million for violating the FCA agreement<\/a>, which prohibits the platform from onboarding high-risk customers.<\/p>\n\n\n\n

\"Coinbase<\/figure>\n\n\n\n

The United Kingdom regulators have levied a $4.5 million (\u00a33.5 million) fine on Coinbase's UK subsidiary, CB Payments Limited (CBPL).<\/p>\n\n\n\n

A penalty is imposed for violating a voluntary agreement that is intended to prevent the onboarding of high-risk customers.<\/p>\n\n\n\n

The U.K.'s Financial Conduct Authority (FCA) announced the fine on Thursday, attributing it to significant flaws in CBPL's control mechanisms.<\/p>\n\n\n\n

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

In October 2020, Coinbase's UK branch<\/a>, CBPL, entered into a voluntary agreement with the Financial Conduct Authority (FCA).<\/p>\n\n\n\n

This arrangement prohibited CBPL from admitting new customers that the regulator had identified as “high-risk.”<\/p>\n\n\n\n

Moreover, it prohibited the company from offering services to these high-risk individuals.<\/p>\n\n\n\n

This agreement aims to mitigate the risk of money laundering and to preserve the integrity of the market.<\/p>\n\n\n\n

Its objective was to prevent potentially illegal activities on the CBPL platform.<\/p>\n\n\n\n

Despite these measures, the FCA discovered that CBPL had onboarded and served 13,416 “high-risk customers.”<\/p>\n\n\n\n

Moreover, Therese Chambers, the FCA's joint executive director of enforcement and market oversight, vehemently criticized Coinbase's CBPL for its deficiencies.<\/p>\n\n\n\n

\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\n\n\n

In addition, she highlighted that the poor compliance raised the risk of criminal activities, including money laundering, within CBPL.<\/p>\n\n\n\n

These violations resulted in a \u00a33.5 million ($4.5 million) fine being imposed by the FCA on CBPL.<\/p>\n\n\n\n

CBPL Responds to Regulators<\/h2>\n\n\n\n

The regulator emphasized that it would not tolerate such negligence, which poses a threat to the integrity of financial markets.<\/p>\n\n\n\n

The fine aims to send a clear message to other financial institutions about the importance of solid compliance procedures and adherence to regulatory standards<\/a>.<\/p>\n\n\n\n

Coinbase acknowledged the FCA's findings and reiterated its commitment to regulatory compliance in response.<\/p>\n\n\n\n

\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\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> report.<\/p>\n\n\n\n

CBPL clarified that it had “unintentionally onboarded” certain high-risk customers between October 30, 2020, and October 1, 2023.<\/p>\n\n\n\n

During this period, these customers comprised just 0.34% of the total new customers who signed up.<\/p>\n\n\n\n

Furthermore, Coinbase underlined its commitment to regulatory compliance and the FCA's findings.<\/p>\n\n\n\n

Therefore, to prevent future breaches, the exchange is currently in the process of enhancing its control mechanisms.<\/p>\n\n\n\n

The news of the fine had an immediate effect on the crypto exchange's stock.<\/p>\n\n\n\n

In U.S. premarket trading on Thursday, July 25, the COIN stock was down 1.94% at $240.31.<\/p>\n","protected":false},"excerpt":{"rendered":"

Coinbase’s UK subsidiary, CBPL, has been fined $4.5 million for violating the FCA agreement, which prohibits the platform from onboarding high-risk customers. The United Kingdom regulators have levied a $4.5 million (\u00a33.5 million) fine on Coinbase’s UK subsidiary, CB Payments Limited (CBPL). A penalty is imposed for violating a voluntary agreement that is intended to […]<\/p>\n","protected":false},"author":56,"featured_media":85086,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21,32],"tags":[150,12098,20836,20835,17739],"class_list":["post-85077","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-crypto-exchange-news","tag-coinbase","tag-coinbase-coin-3","tag-coinbase-crypto-brokerage","tag-coinbase-uk","tag-fca-uk"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2024\/07\/Coinbase-UK-Hit-with-4.5M-Fine-for-High-Risk-Customer-Onboarding.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/85077","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=85077"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/85077\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/85086"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=85077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=85077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=85077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}