US-based cryptocurrency exchange Coinbase Global Inc has reached a $100 million settlement with New York’s Department of Financial Services (DFS), the exchange and the regulator said in statements on Wednesday.
The settlement, which includes a $50-million penalty, caps the regulator’s investigation into the firm’s compliance with requirements to prevent money laundering.
DFS found Coinbase treated its onboarding requirements for customers as a “simple check-the-box”and had not done sufficient background checks, DFS said in a statement.
“It is critical that all financial institutions safeguard their systems from bad actors, and the Department’s expectations with respect to consumer protection, cybersecurity, and anti-money laundering programs are just as stringent for cryptocurrency companies as they are for traditional financial services institutions,” said Superintendent Harris.
“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth. That failure exposed the Coinbase platform to potential criminal activity requiring the Department to take immediate action including the installation of an Independent Monitor.”