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<ul> 
 <li>Coinbase’s UK arm was fined $4.5 million for breaching a 2020 agreement by onboarding high-risk customers.&nbsp;&nbsp;</li> 
 <li>The FCA found significant weaknesses in CBPL’s controls, increasing money laundering risks.&nbsp;&nbsp;</li> 
 <li>The fine marks the FCA’s first enforcement under the Electronic Money Regulations 2011.</li> 
</ul> 
The Financial Conduct Authority (FCA) has fined Coinbase’s UK branch, CB Payments Limited (CBPL), $4.5 million for breaking a voluntary agreement signed in 2020. The agreement was intended to prohibit CBPL from onboarding high-risk customers. 
However, the FCA revealed that CBPL onboarded 13,416 high-risk consumers, which violated the regulatory body’s conditions. 
The FCA’s voluntary agreement guaranteed that CBPL followed safer market practices. This measure attempted to<a href="https://cryptonewsland.com/fca-busts-1b-unregistered-crypto-exchange-arrests-two-suspects/" target="_blank" rel="noreferrer noopener"> reduce the risks</a> connected with high-risk consumers. Despite these safeguards, CBPL’s conduct was deemed to be in violation, resulting in significant penalties. 
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 <a href="https://twitter.com/hashtag/Coinbase?src=hash&amp;ref_src=twsrc%5Etfw">#Coinbase</a> <a href="https://twitter.com/hashtag/UK?src=hash&amp;ref_src=twsrc%5Etfw">#UK</a>'s <a href="https://twitter.com/hashtag/CB?src=hash&amp;ref_src=twsrc%5Etfw">#CB</a> Payments Limited was fined $4.5 million by the Financial Conduct Authority (<a href="https://twitter.com/hashtag/FCA?src=hash&amp;ref_src=twsrc%5Etfw">#FCA</a>) for onboarding 13,416 high-risk customers in violation of a voluntary agreement. The FCA cited significant weaknesses in <a href="https://twitter.com/hashtag/CBPL?src=hash&amp;ref_src=twsrc%5Etfw">#CBPL</a>'s controls, raising potential money laundering… <a href="https://t.co/zsw03sPyE5">pic.twitter.com/zsw03sPyE5</a>— TOBTC (@_TOBTC) <a href="https://twitter.com/_TOBTC/status/1816468916509851778?ref_src=twsrc%5Etfw">July 25, 2024</a>
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Increased Money Laundering Risks 
Therese Chambers, FCA’s joint executive director of enforcement, <a href="https://www.fca.org.uk/news/press-releases/fca-first-enforcement-action-against-firm-enabling-cryptoasset-trading" target="_blank" rel="noreferrer noopener">expressed</a> serious concerns about CBPL’s activities, pointing out significant flaws in its controls that elevated the danger of money laundering. She highlighted the FCA’s commitment to maintaining market integrity and its zero tolerance for such regulatory violations. 
The incident reveals possible hazards for other UK cryptocurrency exchanges and may lead to heightened oversight in the industry. Platforms may face more stringent regulatory restrictions or seek to operate in more crypto-friendly nations. 
Historical Context and Future Implications 
This fine represents a notable enforcement action by the FCA under the Electronic Money Regulations 2011. It is the first time the FCA has utilized this regulation for such enforcement. The breaches went unnoticed for two years, attributed to inadequate monitoring practices for CBPL’s voluntary agreement. 
According to <a href="https://www.coinbase.com/en-gb/blog/coinbase-and-fca-reach-agreement-to-resolve-investigation-into-voluntary-requirement-breaches" target="_blank" rel="noreferrer noopener">Coinbase</a>, only 0.34% of the customers onboarded by CBPL were classified as high-risk. These high-risk customers were onboarded unintentionally between October 2020 and October 2023. The FCA’s investigation focused on CBPL’s e-money transmitter services rather than its crypto-asset transactions. 
CBPL has been authorized by the FCA since 2017 as an e-money institution, providing e-money and payment services in select jurisdictions. As a result, the FCA’s investigation did not delve into any crypto asset transactions. 
Coinbase’s UK arm agreed to resolve the matter, receiving a 30% discount on the fine. This action reflects the FCA’s commitment to enforcing financial regulations and preventing illicit activities. The crypto industry may experience heightened regulatory scrutiny moving forward. 
The post <a href="https://cryptonewsland.com/coinbase-fined-4-5-million-by-uk-regulator-for-breach/">Coinbase Fined $4.5 Million by UK Regulator for Breach</a> appeared first on <a href="https://cryptonewsland.com">Crypto News Land</a>.

Coinbase Fined $4.5 Million by UK Regulator for Breach

Crypto News Land

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