05 Jan 2023 · 1 min read

Coinbase to Pay $100M to Settle New York Regulators' Anti-Money Laundering Complaints

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The US crypto exchange Coinbase has agreed to shell out a total of $100m to settle a complaint relating to “certain historical shortcomings” in its regulatory compliance work.

The massive amount Coinbase is expected to pay is made up of a $50m penalty to the regulator, as well as another $50m committed to compliance program investments. The latter amount will be spent over the next two years, the exchange said.

The news was announced by Coinbase on Wednesday in a blog post where it called the payments “a critical step in our commitment to continuous improvement, our engagement with key regulators, and our push for greater compliance in the crypto space.”

Coinbase has been under investigation by the New York Department of Financial Services (NYDFS) since at least 2021 over matters relating to its compliance program.

Strong regulatory focus

The crypto exchange – which is publicly listed in the US – further said in the blog post that regulatory compliance has been a priority over the past two years.

Among other things, Coinbase said it has developed several purpose-built compliance tools, including a crypto-focused anti-money laundering (AML) tool and an automated Transaction Monitoring System (TMS).

“We are grateful for our partnership with the NYDFS since we received our BitLicense in 2017 and are proud of our collaboration with regulators more broadly,” the post, written by Coinbase’s chief legal officer Paul Grewal, said.

Shares of Coinbase rose by more than 12% in the market on Wednesday to close the day at $37.70. The stock is now down by close to 41% over the past year.

Coinbase stock price past year. Source: Google

Regulators still active in the bear market

According to Philipp Pieper, co-founder of DeFi infrastructure provider Swarm Markets, regulators aren’t resting even though the crypto is in the midst of a deep bear market.

As an example, Pieper pointed to Italy, where Giorgia Meloni’s new government has slapped a 26% tax on crypto capital gains, and the UK, which has taken the opposite approach and is attempting to attract crypto businesses to its shores.

“The two differing approaches seem to mark out different attitudes to the sector at a time when entrepreneurs need sensible positive rules to encourage the right kind of innovation,” Pieper said in a comment shared with Cryptonews.com.