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Coinbase’s UK arm, CB Payments Limited (CBPL), has been fined £3.5 million ($4.5 million) by the Financial Conduct Authority (FCA) for breaching a voluntary agreement designed to prevent the onboarding of “high-risk” customers.
The fine follows CBPL’s failure to comply with restrictions imposed in October 2020, which were intended to stop the exchange from accepting high-risk customers. The FCA reported that CBPL onboarded and served 13,416 such customers despite the restrictions. Approximately 31% of these customers deposited about $24.9 million, which was used to make withdrawals and execute transactions totaling approximately $226 million through other Coinbase entities.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, criticized CBPL’s control measures as “significantly weak” and noted that the breaches increased the risk of money laundering. Chambers emphasized that the FCA would not tolerate any laxity that undermines market integrity.
In response, Coinbase stated that it takes regulatory compliance seriously and is actively working to improve its controls. The company acknowledged the FCA’s findings and its ongoing efforts to enhance compliance. According to CBPL, the onboarding of high-risk customers was unintentional and represented only 0.34% of its new customers during the period from October 30, 2020, to October 1, 2023.
Coinbase shares closed down approximately 5.5% at $231.52 following the news of the fine.