Coinbase to pay $100M after NYDFS probe into compliance lapses


Cryptocurrency exchange Coinbase agreed to pay $100 million as part of a settlement with the New York State Department of Financial Services (NYDFS) for compliance failures that opened the door for criminals to launder money, traffic drugs, and carry out other illegal activity through the platform.

Coinbase will pay a $50 million penalty to New York and invest another $50 million in its compliance functions over the next two years, the NYDFS announced Wednesday. The platform has about 100 million users globally and has been licensed by the NYDFS since 2017.

The regulator said in its consent order it conducted a routine safety and soundness examination of Coinbase in May 2020. Based on its findings, it launched an enforcement investigation in 2021 and took the “extraordinary step” of requiring Coinbase to hire an outside monitoring consultant to help the platform remediate immediate concerns and make further recommendations.

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