Coinbase Pays $50M Fine and Invests $50M to Strengthen Compliance

• Coinbase has agreed to pay $50 million in fines to New York State Department of Financial Services for letting users open accounts with minimal background confirmation.
• The company will also invest $50 million in improving compliance programs to deter drug dealers, child pornographers, and other potentially violent criminals from using the platform.
• The compliance issues with Coinbase were first discovered in 2020 during a routine evaluation.

Coinbase, a publicly traded crypto exchange in the United States, has agreed to pay $50 million in fines to the New York State Department of Financial Services (NYDFS) for allowing users to open accounts with minimal background confirmation. The company obtained a license to conduct business in New York in 2017, and the compliance issues were first discovered through a routine evaluation in 2020.

The digital currency platform will not only pay the fine, but also invest $50 million in strengthening its audit program which is intended to deter criminals from creating accounts with Coinbase. This audit program is designed to identify any issues that may arise with regard to money laundering and other criminal activities.

In addition, Coinbase will be required to comply with the terms of the resolution with the NYDFS. This includes ensuring that all customers complete a detailed background check prior to opening an account with the company. Coinbase will also be required to provide the NYDFS with regular reports on its compliance efforts.

Paul Grewal, Coinbase Chief Legal Officer, said: “Today, Coinbase and NYDFS have come to an agreement to settle an NYDFS investigation, disclosed in our 2021 annual 10K filings, into our historical compliance program. Coinbase has taken substantial measures to address these historical shortcomings and remains committed to being a leader and role model in the crypto space, including partnering with regulators regarding compliance.”

Coinbase’s agreement with the NYDFS is a signal that the company is serious about complying with the law and taking necessary steps to ensure that its customers are safe. The company is also demonstrating its commitment to being a leader in the crypto space and working with regulators to ensure that the industry is regulated and customer safety is maintained.