Coinbase agrees a $100 million settlement with a New York regulator
has agreed a $100 million settlement with the New York State Department of Financial Services , which accused it of violating regulations related to virtual currency, money transmitting, transaction monitoring and cybersecurity."These failures made the Coinbase platform 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,".
The agency claimed that Coinbase's practices concerning due diligence, transaction monitoring and sanctions compliance were"inadequate for a financial services provider of Coinbase’s size and complexity." It accused the company of failing to carry out sufficient background checks on customers before they opened accounts and being unable to keep up with transaction monitoring system alerts.
By late 2021, the DFS said, Coinbase had a backlog of more than 100,000 transaction monitoring alerts it had not reviewed. It also noted that by that time, the backlog of customers who required"enhanced due diligence exceeded 14,000." Coinbase's approach to background checks amounted to a “simple check-the-box exercise,” regulators claimed. You can disable notifications at any time in your settings menu.
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