Coinbase and FCA Reach Agreement to Resolve Investigation into Voluntary Requirement Breaches

Today’s announcement

Today the UK Financial Conduct Authority (FCA) announced that it has concluded its investigation into Coinbase Payments, Ltd. (CBPL) in the UK. The investigation focused on unintentional breaches of a voluntary agreement (VREQ) entered into between the FCA and CBPL in late 2020. In the VREQ, CBPL agreed to restrictions in the onboarding of certain high-risk customers to CBPL, where we provide e-money and payment services.

The FCA has found that CBPL breached the terms of that VREQ and as a result of the findings CBPL has agreed to pay a fine of £3,503,546. We take the FCA’s findings and our broader regulatory compliance very seriously and CBPL continues to proactively enhance its controls to ensure compliance with its regulatory obligations. In its notice, the FCA acknowledged this as well as CBPL’s co-operation with its investigation. 

A note on the investigation

The FCA’s investigation was limited to the VREQ and focused on the design, testing, implementation and monitoring of the controls that we put in place to comply with the restrictions set out in the VREQ. These restrictions required us not to on-board certain high-risk customers in the UK where we provide e-money and payment services to customers. 

CBPL has been authorised by the FCA since 2017 as an e-money institution, and provides e-money and payment services to customers located in certain jurisdictions. As a result, CBPL is not authorised by the FCA to conduct cryptoasset transactions for customers and the FCA’s investigation did not look at any cryptoasset transactions. However, CBPL unintentionally onboarded some customers between October 30, 2020, and October 1, 2023, (representing 0.34% of customers on-boarded) who were classified as high-risk under the terms of the VREQ. This led to the FCA's investigation and subsequent action.

CBPL agreed to the FCA implementing the VREQ (which only applied to our UK business, no other Coinbase companies or their customers were impacted) in October 2020 due to some concerns the FCA identified in early 2020 about CBPL’s financial crime framework. Since then, we have dedicated significant time and resources to improving our UK financial crime framework, and these efforts have been acknowledged by the FCA.

Next steps

Coinbase remains committed to high standards of regulatory compliance, and this means partnering with regulators when it comes to compliance and other areas. We are always willing to acknowledge when we fall short, and to make improvements – which is what we have done here. 

We believe our investment in compliance stands out in the market as one of the highest, and that our customers should feel safe and protected when using our platforms. Our goal has always been and will always be to build the most compliant, trusted and secure platform in the world.