Settlement with NY state regulator
The New York State Department of Financial Services (NYDFS) announced on the 4th that it had reached a settlement with the major US crypto asset (virtual currency) exchange Coinbase over its compliance issues.
The NYDFS investigation found widespread and long-term problems with anti-money laundering (AML) and know-your-identity (KYC). Coinbase paid $50 million in fines and agreed to invest $50 million to strengthen compliance, and settled for a total of $100 million.
In addition to AML and KYC, NYDFS said there were problems with customer due diligence, transaction monitoring, suspicious transaction reporting and sanctions compliance. These compliance issues have left Coinbase vulnerable to fraud, money laundering and other criminal activities, they argue.
The enhancement of compliance will be implemented over two years in accordance with the plan approved by NYDFS. NYDFS Superintendent Adrienne A. Harris now commented:
Protecting systems from criminals is a serious responsibility for all financial institutions. We demand the same level of protection from cryptocurrency companies as traditional financial institutions.
Coinbase’s compliance measures have not kept pace with the company’s growth.
Coinbase acquired a bit license from NYDFS in 2017. After that, it was under NYDFS oversight, but the NYDFS said it did not do enough to match the scale and complexity of the business.
What is BitLicense
A license required to conduct a virtual currency business in the state of New York, USA. The English notation is “BitLicense”, which has been issued by NYDFS since 2015.
Cryptocurrency Glossary
association: What is the virtual currency exchange Coinbase | Information and points to note for investors
coinbase statement
Coinbase released a statement today regarding the settlement. It said it had reported last year that it was cooperating with the NYDFS investigation as a company under its supervision.
Coinbase explained that the problem was pointed out this time as a compliance measure from 2018 to 2019. In addition, he said that it was seen as a problem that measures were not taken in line with the company’s growth in 2021.
He explained that Coinbase’s aim is to be the most reliable, secure and compliant exchange in the world, and that he sees this settlement as an important step forward.
Coinbase shares surged 12% from the previous day following the settlement with NYDFS.
association: Financial market tankan on the morning of the 5th | NY Dow Rebound Coinbase +12% from the previous day
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