Coinbase Agrees to $100 Million Settlement With New York Regulators
From the Desk of Jim Eccleston at Eccleston Law.
Coinbase Global Inc., has agreed to a $100 million settlement with New York Regulators over allegations that the cryptocurrency exchange permitted customers to open accounts without conducting adequate background checks.
Coinbase will pay a $50 million fine and additionally spend $50 million in an effort to improve compliance over a two-year period, according to the New York State Department of Financial Services. The regulators cited certain violations. For example, Coinbase opened a customer account in one instance where the individual was criminally charged with crimes pertaining to child sexual abuse materials in the 1990s. Coinbase failed to close the account for nearly two years.
As another example, Coinbase permitted an individual claiming to be a company employee to open an account on behalf of the company without authorization, which lead to $150 million being misappropriated. Finally, the New York State Department of Financial Services determined that Coinbase had failed to keep up with a swelling backlog of at least 100,000 unreviewed transaction monitoring alerts by late 2021.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.
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