Coinbase reaches $100 million settlement with New York regulators

New York

Coinbase, one of the most popular cryptocurrency trading platforms in the United States, faces a $100 million settlement after New York regulators found it had made a “serious failure” to comply with state anti-money laundering laws. agreed.

The settlement includes a $50 million fine that Coinbase must pay to the New York Department of Financial Services and a promise to spend $50 million over the next two years to strengthen its compliance program.

In a statement Wednesday, the NYDFS said that Coinbase’s poor compliance practices had resulted in “malicious acts, including potential money laundering, activities related to alleged child sexual abuse material, and potential drug trafficking.” Some may use it for “serious criminal activity.” ”

The publicly traded company, with a market capitalization of $7.6 billion, said it had taken “substantial steps” to address its “historic shortcomings.”

“We have not always been perfect, but our goal has always been and will always be to be the most reliable and It is to build a compliant and safe virtual currency exchange.

“Our investment in compliance is more advanced than any other cryptocurrency exchange in the world and we believe our customers can feel safe and protected while using our platform. .”

New York regulators launched an investigation into Coinbase in early 2022 after the company’s compliance program couldn’t keep up with the pace of business growth. A separate monitor was set up for the investigation. The monitor will be installed for at least another year if needed.

After one of the year’s most talked-about IPOs in the spring of 2021, Coinbase’s stock price has fallen nearly 90% as crypto enthusiasm waned and losses spread across the industry.

Coinbase’s statement included a reference to the so-called crypto winter. This is the chill that hit the industry in 2022, causing several companies to go bankrupt, including Sam Bankman-Fried’s FTX.

“We recognize that the cryptocurrency industry is currently at an inflection point and that every public move by a cryptocurrency company will be subject to intense scrutiny.

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