Coinbase UK Faces $4.5 Million Fine Over High-Risk Customer Onboarding
UK regulators fined Coinbase’s UK arm, CBPL, $4.5 million on Thursday. The penalty is for breaching an agreement that was kept in place to stop high risk customers from joining the exchange.
Key points:
- UK regulators fine Coinbase’s UK arm $4.5 million.
- The violation was on the grounds of breaching an agreement.
- The voluntary agreement was kept in place to stop high-risk customers.
- CBL reportedly breached the agreement and served 13,416 high risk customers.
As per the details, CBPL had entered into a voluntary agreement in October 2020 with the UK’s FCA. The agreement also prohibited CBPL from providing services to these high-risk customers.
Coinbase’s UK arm onboarded 13,416 high-risk customers
According to the details from FCA, CBPL violated the agreement and gave 13,416 high-risk customers access to the exchange.
31% of the customers deposited $24.9 million at the exchange. Additionally, these customers used these funds to make multiple transactions via other Coinbase group firms. These transactions amounted to over $226 million.
The FCA said, “The breaches were the result of CBPL’s lack of due skill, care and diligence in the design, testing, implementation and monitoring of the controls put in place to ensure that the VREQ was effective. “
The FCA also stated that the firm also failed to consider all the loopholes. They also spoke about the inadequacies in the initial monitoring of compliance with the VREQ.
