Coinbase reaches a $100 million settlement with the New York regulator
What it covers is…
Coinbase, one of the most popular US cryptocurrency trading platforms, has agreed to pay $100 million for settlement after New York regulators encountered “ significant failure” to fulfill the state’s anti-money laundering laws and regulations.
The following settlement included a $50 million penalty that Coinbase had to pay to the Department of Financial Services and gave an assurance to spend $50 million to strengthen the company’s acceptance program over the next two years.
Coinbase’s ‘less-than-meager’ acceptance program left it unguarded for bad artists to leverage it for “serious criminal conduct,” New York’s Department of Financial Services (NYDFS) mentioned in a statement on Wednesday, embracing “possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking.”
The publicly listed company, which is evaluated at $7.6 billion, mentioned that it had taken “substantial measures” to label “historical shortcomings.”
Paul Grewal, the Chief Legal Officer of Coinbase, stated, “Although we have not always been perfect, our goal has always been and will always be to build the most trusted, compliant, and secure crypto exchange in the world.”
“We believe our investment in compliance outpaces every other crypto exchange anywhere in the world and that our customers can feel safe and protected while using our platforms,” he added.
However, the New York regulator started investigating Coinbase in early 2022 after the company’s acceptance program failed to keep up with the swiftness of its business growth. Further, the regulator said they had installed an independent monitor during the investigation, which will be installed for one more year as per needs.
After one of the rumored IPOs of the year in the leap of 2021, Coinbase’s stock has collapsed some 90% as crypto intensity has dwindled and losses have spread overall in the industry.
Coinbase’s statement also included a reference to the so-called ‘crypto winter,’ a chill that struck the industry in 2022, pulling down various companies, such as Sam Bankman-Fried’s FTX (a cryptocurrency-trading firm).
“We recognize that the crypto industry is at an inflection point right now and that every public move by a crypto company will receive intense scrutiny,” Grewal stated.