Benzinga - Coinbase (NASDAQ:COIN) Global Inc (NASDAQ: COIN) shares are trading higher Wednesday after the company reached a $100 million settlement with New York regulators.
What To Know: Coinbase has reached a settlement with the New York Department of Financial Services in which it will pay a $50 million fine, as well as invest an additional $50 million to improve its compliance program, according to a statement from Coinbase.
A new regulatory filing indicates the regulators found that Coinbase violated anti-money-laundering laws by allowing customers to open accounts without conducting appropriate background checks and gathering sufficient information.
Related Link: 'We're Not Perfect': Coinbase Reaches $100M Settlement With NY Regulators, Promises Compliance
The compliance issues were initially flagged in 2020, but a formal investigation wasn't opened until 2021. Regulators found problems dating back to 2018.
"The Department’s Examination found significant deficiencies across Coinbase’s compliance program, including its Know-Your- Customer/Customer Due Diligence (“KYC/CDD”) procedures, its Transaction Monitoring System (“TMS”), and its OFAC screening program," the filing states.
Regulators noted that Coinbase had a backlog of more than 100,000 unreviewed transaction monitoring alerts by the end of 2021.
Although Coinbase has made some progress in remediating its compliance issues, certain deficiencies persisted as of August, 2022. The filing indicates that Coinbase has developed an additional targeted remediation plan and work to implement the plan is ongoing.
"We view this resolution as a critical step in our commitment to continuous improvement, our engagement with key regulators, and our push for greater compliance in the crypto space – for ourselves and others," Coinbase said.
CRYPTO Price Action: At publication time, Bitcoin (CRYPTO: BTC) was up 1.71%, while Ethereum (CRYPTO: ETH) was up 4.49%.
Coinbase shares were up 13.6% at $38.18 Wednesday afternoon, according to Benzinga Pro.
Photo: courtesy of Coinbase.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.