Financial watchdogs found that Coinbase broke laws against money laundering by letting people open accounts without doing enough background checks; it must therefore pay a $50 million fine. Coinbase, a cryptocurrency trading exchange based in the United States, agreed to pay a $50 million fine. On Wednesday, the agreement with the New York State Department of Financial Services was made public.
Also, Coinbase had to spend an additional $50 million to improve its compliance program, which tries to keep people who might break the law, like drug dealers and child pornographers, from opening accounts on the exchange.
The industry as a whole emerged without the regulation and oversight that are standard for banks, brokerages, insurance companies, and investment firms. For breaking a number of financial regulations, including anti-money-laundering laws, the Department of Financial Services fined Robinhood’s cryptocurrency trading division $30 million in August.
Regarding allegations that Kraken may have violated US sanctions by offering trading services to clients who appeared to be in Iran, the Treasury Department announced a settlement with Kraken in November.
Coinbase revealed that New York financial regulators had looked into its adherence to bank secrecy laws in a regulatory filing with the Securities and Exchange Commission in November. FTX, formerly a competitor of Binance, was also under investigation for violating anti-money-laundering laws. The charge against Mr. Bankman-Fried by federal prosecutors in New York is that he oversaw a scheme to steal billions of dollars in customer deposits at FTX.
The accusations against Kraken, Coinbase, and FTX show that the cryptocurrency industry is putting a new focus on following the rules. The investigations show that companies that deal in cryptocurrencies need to follow the same rules and laws as banks and other financial institutions.
