Cryptocurrency exchange Coinbase reached an agreement to pay a $50 million penalty to New York state’s Department of Financial Services to settle accusations that it enabled customers to open accounts without conducting necessary background checks.
As per the settlement, the crypto exchange is also required to invest $50 million into its compliance program over the next two years., Superintendent of Financial Services Adrienne A. Harris said the compliance failures exposed the platform to serious criminal conduct, such as fraud, possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking, among others.
The San Francisco-based platform has been licensed to conduct virtual currency operations and money-transmitting business in New York since 2017. However, after NYDFS carried out an examination and enforcement investigation in early 2022, the company’s compliance program failed to keep up with the pace of its business growth.