The UK's Financial Conduct Authority (FCA) has fined Coinbase’s UK subsidiary, CB Payments Limited (CBPL), $4.5 million for breaching anti-money laundering regulations. This is the first enforcement action by the FCA under the Electronic Money Regulations 2011, raising concerns about the future of crypto regulation in the UK, with some comparing it to the MiCA framework in the EU.

• The FCA's unprecedented fine on Coinbase's UK arm.
• Concerns over potential tightening of crypto regulation.
• Legal experts argue it's a "one-off" action, not a trend.
• The future of crypto policy in the UK remains uncertain.

The FCA’s fine, announced on July 25, stems from CBPL’s failure to comply with an agreement to avoid onboarding high-risk customers. Despite a warning issued in 2020, CBPL allegedly provided e-money services to over 13,000 high-risk customers, processing approximately $24.9 million from 31% of these clients. While this fine has sparked fears of increased regulatory scrutiny, some experts suggest that this action is not indicative of a broader crackdown. Instead, it underscores the importance of stringent compliance measures, whether on a complex financial system or an easy crypto wallet.

Therese Chambers, FCA’s joint executive director of enforcement and market oversight, highlighted the severity of the breach, stating, “CBPL’s controls had significant weaknesses and the FCA told it so, which is why the requirements were needed. CPBL, however, repeatedly breached those requirements.”

The FCA's action against Coinbase highlights the growing challenges in maintaining compliance in the rapidly evolving crypto space. As the industry continues to expand, the need for robust corporate governance and compliance structures becomes increasingly critical, much like the standards set by the MiCA regulations in the EU.

The FCA's action against Coinbase highlights the growing challenges in maintaining compliance in the rapidly evolving crypto space. As the industry continues to expand, the need for robust corporate governance and compliance structures becomes increasingly critical, much like the standards set by the MiCA regulations in the EU, which are central to European crypto regulation.

Quotes and Expert Opinions

Allegedly, per FCA’s report, “Despite the restrictions in place, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers. Approximately 31% of these customers deposited around $24.9 million. These funds were used to make withdrawals and then execute multiple crypto asset transactions via other Coinbase Group entities, totaling approximately USD $226 million” - Source

Coinbase responded to the fine with an official statement, acknowledging, “Coinbase remains committed to high standards of regulatory compliance, and this means partnering with regulators when it comes to compliance and other areas. We are always willing to acknowledge when we fall short, and to make improvements – which is what we have done here.” - Source

Charlotte Tregunna, partner at business crime law firm Peters & Peters. “The fact that the FCA hasn’t used its enforcement powers until now suggests that it was using these as a last resort. CPBL had all the time in the world to sort out their systems and controls, and yet they didn’t in three years. It’s an obvious breach, and the FCA can’t really ignore it if they were given adequate time to resolve it.” - Source

FAQ

How to sell bitcoin on Coinbase?
To sell bitcoin on Coinbase, navigate to the "Trade" section of the platform. Select "Sell" and choose bitcoin from the list of assets. Enter the amount you wish to sell and confirm the transaction. For real-time updates on any potential issues or maintenance that might affect your transaction, refer to the Coinbase Status page. Once confirmed, your funds will be transferred to your Coinbase account balance, which you can then withdraw to your bank account or another crypto wallet address.

How is a transaction verified on a cryptocurrency network?
A transaction on a cryptocurrency network is verified through a process called mining, where miners use computational power to solve complex mathematical problems. Once a problem is solved, the transaction is added to the blockchain and becomes immutable, ensuring its authenticity and security.

How do you contact Coinbase?
To contact Coinbase, visit their support page and submit a request through their online form, or check the Coinbase Status page for real-time updates before reaching out via their customer support phone number or live chat for immediate assistance with any issues related to Coinbase products.

How to create a crypto wallet?
Creating a crypto wallet involves selecting a wallet provider and following their setup instructions. You can choose between different types of wallets, such as software wallets (easy crypto wallet), hardware wallets, or paper wallets. Crypto wallet development often involves integrating security features and user-friendly interfaces to ensure a seamless experience. Once set up, you’ll receive a unique crypto wallet address to send and receive cryptocurrency.