In a 100 million settlement with New York’s financial regulator Coinbase. One of the most widely used US cryptocurrency exchanges, Coinbase, settled for $100 million after “significant failures” to comply with New York’s anti-money-laundering laws were discovered by state regulators.
Coinbase has agreed to pay the New York Department of Financial Services $50 million and invest another $50 million over the next two years to strengthen the company’s compliance program as part of the settlement.
NYDFS said in a statement on Wednesday that Coinbase had inadequate compliance practices that made it susceptible to being used for “serious criminal conduct,” such as “possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking.”
Read more: Tuesday, FTX Founder Sam Bankman-Fried Will Go To Court.
In response to “historical shortcomings,” the $7.6 billion company, which is publicly traded, claimed it had taken “substantial measures.”
When asked about the company’s history, Coinbase’s chief legal officer Paul Grewal said, “While we have not always been perfect, our goal has always been and will always be to build most trusted, compliant, and secure crypto exchange in world.”
According to us, “our investment in compliance outpaces every other crypto exchange around the world,” so our customers should feel secure using our platforms.
According to Coinbase, the New York Department of Financial Services opened an investigation into the company in early 2022 because its compliance program could not keep up with the rapid expansion of its business. The investigation into the regulator’s claims was entrusted to an independent monitor, who will remain in place for at least another year.
As crypto enthusiasm has waned and losses have spread throughout the industry, Coinbase’s stock has tumbled some 90% since its IPO in the spring of 2021, one of the year’s most talked-about events.
In its statement, Coinbase mentioned the “crypto winter,” the industry-wide freeze that occurred in 2022 and contributed to the demise of several companies, including FTX, founded by Sam Bankman-Fried.
“We recognize that the cryptocurrency industry is at an inflection point right now and that every public move by a crypto company will receive intense scrutiny,” Grewal said.