Coinbase, a publicly traded U.S.-based cryptocurrency trading exchange, has agreed to pay a $50 million penalty to the New York State Department of Financial Services for failing to conduct adequate background checks on customers in violation of anti-money-laundering laws, Reuters reports.
The settlement also requires the company to invest an additional $50 million in order to strengthen its compliance program and prevent criminals from opening accounts with the exchange.
The company's embattled stock has spiked 7% on the settlement news.
Regulators found that Coinbase allowed customers to open accounts without investigating their backgrounds or keeping an eye out for suspicious activity.
The exchange was ordered to appoint an independent monitor to help reorganize its day-to-day operations.
This settlement will require Coinbase to work with the monitor for another year in order improve its compliance system.
Coinbase's stock took a massive hit last year due to the double whammy of falling crypto prices and the FTX drama.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
Godfrey Benjamin
Dan Burgin
Vladislav Sopov