The UK Financial Conduct Authority (FCA) says it has fined CB Payments Limited (CBPL) £3,503,546 or approximately $4.5 million for breaching the voluntary agreement (VREQ) that the company and the regulator reached in late 2020 have been entered into.
CBPL, a subsidiary of crypto exchange Coinbase, offers e-money and payment services to its customers, but the company is not registered with the FCA to conduct crypto asset transactions in the United Kingdom.
The voluntary agreement includes restrictions aimed at preventing CBPL from taking on new high-risk clients, while addressing the regulator’s concerns about the framework for combating financial crime.
In a statement, FCA said CBPL has offered e-money services to 13,416 high-risk customers.
“The breaches resulted from the CBPL’s lack of expertise, care and diligence in designing, testing, implementing and monitoring the controls put in place to ensure the VREQ was effective. This included not designing the controls to take into account all the different ways customers can be involved.”
CBPL has agreed to pay the fine. In a statement, Coinbase said it remains committed to high standards of regulatory compliance.
“We take the FCA’s findings and our wider regulatory compliance very seriously and CBPL continues to proactively enhance its controls to ensure compliance with its regulatory obligations.”
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