Coinbase reaches $100 million settlement with New York regulator
By Allison Morrow, CNN
Coinbase, one of the most popular US crypto-trading platforms, agreed to a $100 million settlement after New York regulators found “significant failures” to comply with the state’s anti-money-laundering laws.
The settlement includes a $50 million penalty Coinbase must pay to the New York Department of Financial Services and a pledge to spend $50 million to strengthen the company’t compliance program over the next two years.
Coinbase’s less-than-adequate compliance practices left it vulnerable for bad actors to leverage it for “serious criminal conduct,” NYDFS said in a statement Wednesday, including “possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking.”
The publicly traded company, which is valued at $7.6 billion, said it had taken “substantial measures” to address “historical shortcomings.”
“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,” said Paul Grewal, Coinbase’s chief legal officer, in a statement.
“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.”
The New York regulator began investigating Coinbase in early 2022, it said, after the company’s compliance program failed to keep up with the pace of its business growth. The regulator said it had installed an independent monitor to investigate, and that monitor will remain in place for at least another year as needed.
After one of the buzziest IPOs of the year in the spring of 2021, Coinbase’s stock has tumbled some 90% as crypto fervor has waned and losses have spread throughout the industry.
Coinbase’s statement included reference to the so-called crypto winter — a chill that hit the industry in 2022, bringing down several companies, including Sam Bankman-Fried’s FTX.
“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 said.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
