Coinbase will pay a penalty of $50 million for failing to comply with the New York Banking Law and other state regulations, according to a press release on Jan. 4.
The largest crypto exchange by trading volume will also invest another $50 million over the next 2 years to update its compliance systems as per a plan approved by the NY regulators.
Coinbase has been licensed by the New York State Department of Financial Services (NYDFS) since 2017. During an examination followed by an enforcement investigation, the NYDFS found that Coinbase had “inadequate” measures to prevent money laundering.
The regulators noted that Coinbase’s Know Your Customer and Customer Due Diligence (KYC/CDD) program was “immature and inadequate,” both in terms of how it was designed and implemented. For KYC details, Coinbase only required users to simply check a few boxes and failed to conduct due diligence, the regulators stated.
Additionally, growing at a high pace — Coinbase touts 108 million veri
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