Connect with us

New York

New York regulators settled with Coinbase to pay $100M due to the platform’s significant failures spotting potential criminal activity

Published

on

NEW YORK — On Wednesday, New York and Coinbase reached a $100 million settlement over what state officials called “significant failures” in Coinbase’s systems for spotting possible criminal activity.

The state Department of Financial Services said that Coinbase’s program to stop money laundering and its way of keeping track of transactions to look for suspicious activity weren’t enough for a company of its size and complexity. The department said that Coinbase’s transaction monitoring system was sending out so many alerts that reports of suspicious activity were sometimes filed months after Coinbase first found out about them.

“It is very important that all financial institutions protect their systems from bad actors,” Financial Services Superintendent Adrienne A. Harris said in a news release. “The Department’s expectations for consumer protection, cybersecurity, and anti-money laundering programs are just as high for cryptocurrency companies as they are for traditional financial services institutions.” “Coinbase didn’t build and keep up a compliance program that worked well enough to keep up with its growth.”

Under the terms of the settlement, Coinbase will pay a $50 million fine to New York state and put another $50 million into its compliance program. A state-hired independent monitor will work with Coinbase for a year to make sure they follow the rules.

Paul Grewal, Coinbase’s chief legal officer, said in a statement that the company has taken a lot of steps to fix the problems that the New York investigation found. He also said that Coinbase “remains committed to being a leader and role model in the crypto space,” which includes working with regulators to make sure they are following the rules.

Grewal said, “We think our investments in compliance are better than those of any other crypto exchange in the world, so our customers can feel safe and protected when they use our platforms.”

Advertisement

Trending