Coinbase Slapped with £3.5m Fine Over Money Laundering Failures
Crypto giant Coinbase has been hit with a hefty £3.5 million fine by the UK’s Financial Conduct Authority (FCA) for flouting anti-money laundering (AML) rules. This latest crackdown marks one of the most significant regulatory actions against a crypto firm on British soil.
Millions of Customers, Thousands Flagged as High-Risk
The fine targets Coinbase’s UK subsidiary, CB Payments Limited (CBPL). Though authorised as an Electronic Money Institution, CBPL wasn’t registered to handle crypto assets. Since 2020, it onboarded nearly four million customers—including more than 13,000 considered high-risk—despite voluntary warnings not to do so.
The FCA uncovered major holes in CBPL’s financial crime controls during a 2020 inspection. Shockingly, these risky customers were allowed to move around £180 million (around US$226 million) through other Coinbase entities, leaving the door wide open to potential money laundering.
FCA Cracks Down as Crypto Risks Loom
“The risks of money laundering in crypto-assets are severe and we will not tolerate weak controls,” warned Therese Chambers, FCA’s enforcement director. The fine was reduced after Coinbase finally complied with FCA orders, but the message is clear: sloppy crypto regulation won’t be forgiven.
Regulatory Woes Continue for Coinbase
This isn’t Coinbase’s first brush with regulators. The firm has faced fines and scrutiny in the Netherlands and the US over similar compliance blunders. Meanwhile, Coinbase has shaken up its board, adding veteran Democratic strategist Chris Lehane to bolster governance amid intense regulatory pressure.
As authorities worldwide tighten the noose on crypto firms, Coinbase’s FCA fine highlights the uphill battle for crypto platforms trying to stay on the right side of the law in a fast-changing financial landscape.
