Coinbase, a major U.S. cryptocurrency exchange, has reached a settlement with the New York Department of Financial Services (NYDFS) for $100 million. Why did this so- called most compliant cryptocurrency exchange spend $100 million in the cold winter?
Blocker reported yesterday (5th) that Coinbase was accused of violating anti-money laundering regulations, and finally reached a settlement agreement of US$100 million with the New York Financial Services Department. Coinbase will have to pay a fine of US$50 million and invest an additional US$50 million Used to improve compliance measures.
Kordan, CEO of KryptoGO, a Taiwanese Web3 monitoring technology company, pointed out that Coinbase is one of the largest cryptocurrency exchanges in the United States. New York regulators accused the company of allowing users to open accounts without sufficient background checks, which violated the law. Anti-money laundering laws, which also mark the latest example of the nascent cryptocurrency industry facing greater scrutiny, “following the FTX incident, governments stepped up their financial management efforts, and the US regulatory punch hit. “
The New York Department of Financial Services mentioned in its public documents that Coinbase’s KYC process, transaction monitoring, and anti-money laundering mechanisms were not up to standard. Coinbase initially obtained a New York operating license in 2017, and later found in a routine inspection in 2020. Coinbase has serious compliance deficiencies, and these problems can be traced back to 2018. The New York Department of Financial Services stated that Coinbase violated money laundering prevention regulations by allowing users to open accounts without verifying the identity of users.
Kordan explained, ” The main reason for this is that Coinbase’s business has grown too fast, resulting in insufficient compliance capacity, so KYC and AML have not been improved, resulting in some crimes. The US government imposed a heavy fine of 100 million US dollars and imposed a deadline Improvement. Coinbase promises to invest more resources in the construction of Compliance to ensure the stability and security of virtual currency transactions. ”
The Taiwan government has precedents to follow, VASP operators need to be careful
Kordan also mentioned that looking back at Taiwan’s supervision, most of them will be based on the US guidelines as a precedent. In addition, the domestic Financial Regulatory Commission’s policies are quite strict. In Taiwan, complete and compliant manufacturers and systems are needed to help VASPs build compliance with regulations. environment to avoid becoming a hotbed of crime.
KryptoGO has cooperated with Dow Jones and Jumio. It has a complete international list database, constructs eKYC certificates and face recognition to assist in strengthening KYC checkpoints, and there are also potential problems of negative news censorship and supplementary data that are not real-time. The KryptoGO Compliance system can help VASPs improve efficiency And reduce costs, meet compliance and supervision.