Coinbase Agrees to Pay $100 Million to New York State Regulators
Due to the “significant failures in its compliance program”, the publicly traded cryptocurrency exchange agreed to pay the state of New York 100 million dollars in fines.
Following recent steps taken by financial regulatory bodies to keep an eye on cryptocurrency firms, Coinbase and the New York State Department of Financial Services announced the $100 million settlement on Wednesday for breaking NY State law.
After one of the biggest cryptocurrency exchanges in the world, FTX, collapsed in November, those efforts have become more urgent. Sam Bankman-Fried, the company’s former founder, is currently accused of several crimes.
The Coinbase settlement also comes only a day after a joint statement on the potential effects of cryptocurrency on financial institutions was issued by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.
The statement states, “Given the significant risks highlighted by recent failures of several large crypto-asset companies, the agencies continue to take a careful and cautious approach related to current or proposed crypto-asset-related activities and exposures at each banking organization,” the statement reads.” 
Coinbase consented to pay the state $50 million in penalty fees as part of the settlement, as well as an additional $50 million to expand its compliance program. 
Failures in the crypto exchange’s compliance program made it, “vulnerable to serious criminal conduct, including, among other things, examples of fraud, possible money laundering, suspected child sexual abuse material-related activity, and potential narcotics trafficking,” according to New York regulators. 
A backlog of thousands of unreviewed transaction monitoring warnings, an excessively simplified client due diligence procedure, and other questionable activities that the exchange neglected to adequately examine were among these errors.
The development of Coinbase’s compliance program “outpaces every other crypto exchange anywhere in the world,” Chief Legal…