Cryptocurrency exchange Coinbase has agreed to pay $100 million to settle claims by the NYDFS accusing the exchange of non-compliance with AML rules from 2020 to 2021.
This came to light in a consent-based injunction signed Jan. 4 by New York State Department of Financial Services (NYDFS) superintendent Adrienne Harris. Earlier, the regulator accused the marketplace Coinbase of failing to take proper anti-money laundering measures in 2020 and 2021.
The document states that Coinbase’s non-compliance with anti-money laundering (AML) regulations is due to a lack of staff, resources and tools. As a result, by the end of 2021, the number of pending suspicious transaction monitoring alerts exceeded 100,000, and many of them had been pending for several months. In addition, the number of clients requiring more detailed due diligence exceeded 14,000.
The investigation into the exchange began in 2020. It is assumed that Coinbase has not performed customer data analysis since 2018. Previously, Coinbase agreed to hire an independent expert to verify the exchange’s compliance with AML rules and KYC (“Know Your Customer”) procedures. However, this did not solve the problem, so the New York City regulator decided to take action.
To settle the NYDFS lawsuit, Coinbase will pay a $50 million fine. The remaining $50 million will be used to conduct AML compliance reviews. Coinbase management said that the additional funds will be an important step in the exchange’s journey to improve its business processes, as well as closer interaction with regulators and regulatory compliance.
Recall that in December, Coinbase received a Virtual Asset Service Provider (VASP) license from the Central Bank of Ireland, allowing the exchange to serve residents of Ireland and Europe.
