[ad_1]
US crypto exchange Coinbase has been fined $50 million (£41 million) by regulators for repeated anti-money laundering failures.
The regulator, the New York State Department of Financial Services (NYSDFS), said the failure left the exchange open to “fraud, potential money laundering, activity related to suspected child sexual abuse material, and potential drug trafficking.” It has made them vulnerable to serious criminal activity, such as ).
Once the world’s second largest cryptocurrency exchange, Coinbase went public on the U.S. stock exchange in April 2021. We didn’t do enough background checks and need to spend another $50 million over the next two years to improve our compliance services. Found a regulator.
The company obtained a license from the NYSDFS in 2017 to allow customers to trade cryptocurrencies on its platform, but government departments have since found that compliance measures were insufficient for an exchange of its size. said he did.
For more information Cryptocurrency
“It is critical that all financial institutions protect their systems from malicious actors, and regulatory expectations regarding consumer protection, cybersecurity, and anti-money laundering programs are as strong as those of traditional financial services institutions. It’s also tough on businesses, said Adrienne, NYSDFS superintendent Harris.
“Coinbase has failed to build and maintain a functioning compliance program that can accommodate its growth. This failure has exposed the Coinbase platform to potential criminal activity,” she added.
The company acknowledged the failure, saying it “takes NYSDFS’ concerns seriously and has taken substantial steps to address these historical shortcomings.”
The penalty is another setback to credibility in the struggling crypto industry after the collapse of crypto exchange FTX, Three Arrows Capital Hedge Fund and other groups.
This follows an unprecedented joint statement by three major US federal regulators on cryptocurrencies.
see more Cryptocurrency
The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) have warned that U.S. banks are exposed to the risks of fraud, legal uncertainty, and misleading disclosures by cryptocurrency companies. said that more attention should be paid to They added that they were concerned about the safety and soundness of the bank’s business model, which is heavily focused on cryptocurrencies.
The Federal Reserve, FDIC, and OCC have highlighted risks related to crypto, including digital asset market volatility, contagion risk within the sector, and weak risk management.
Banks issuing or holding crypto tokens stored on public decentralized networks are “highly likely” to be inconsistent with safe and sound banking practices, the regulator added, offering crypto services to customers. This could hurt the continued efforts of some lenders to
The statement comes after months of reluctance by regulators to issue unified guidance and rules on cryptocurrencies, despite banks expressing a desire for greater clarity.
A joint statement said the regulators are monitoring banks that may be exposed to crypto-related risks and are considering proposals for banks to engage in cryptocurrency activities.
“It is important that risks associated with the crypto-asset sector that cannot be mitigated or controlled do not migrate into the banking system,” the regulator said.
[ad_2]
Source link
