'We're Not Perfect': Coinbase Reaches $100M Settlement With NY Regulators, Promises Compliance

Coinbase Global Inc COIN has reached a $100 million settlement with the New York Department of Financial Services (NYDFS).

The "consent order" includes a $50 million penalty plus $50 million in "compliance program investments over the next two years," Coinbase said in a statement.

"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,” the company added.

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COIN increased in value as investors saw the potential end of regulatory problems for the exchange. Over the past two years, the exchange says it has made “substantial investments and actions,” including:

• Built crypto-focused AML and sanctions compliance tools, such as blockchain analytics tool, Coinbase Tracer.
• Enhanced automated Transaction Monitoring System (TMS).
• A proprietary Customer Risk Scoring (CRS) system.
• Enhanced Due Diligence (EDD) program targeting high-risk customers.
• Travel Rule Universal Solution Technology (TRUST), an industry-driven solution designed to comply with Travel Rule requirements.

NYDFS found that Coinbase’s onboarding requirements were a “simple check-the-box” process without sufficient background checks.

Coinbase is a publicly-traded firm, one of the largest global crypto exchanges, and the only major US-based exchange. It has been under investigation by regulators, having disclosed investigative subpoenas and requests from the U.S. Securities and Exchange Commission (SEC) for information.

Coinbase seeks to put a positive spin for the new year on the resolution to this investigation, which it hopes will put them ahead of the game in U.S.-based compliance.

“Coinbase remains committed to being a leader and role model in the crypto space, and this means partnering with regulators when it comes to compliance and other areas," the company stated. "We believe our investment in compliance outpaces every other crypto exchange anywhere in the world, and that our customers should feel safe and protected while using our platforms. And although we have not always been perfect, our goal has always been and will always be to build the most trusted, compliant, and secure crypto exchange in the world.”

Image by Mohamed Hassan from Pixabay