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Popular cryptocurrency exchange Coinbase announced an agreement Wednesday to pay $50 million to resolve a New York investigation into lapses concerning its anti-money laundering and know-your-customer practices.
The company said it would invest an additional $50 million to improve on those programs.
One of the few crypto exchanges headquartered in the U.S. and regulated by state financial statutes, Coinbase saw explosive growth during the pandemic as the price of bitcoin soared to more than $60,000. But by the end of 2021, Coinbase had a backlog of more than 100,000 unreviewed transaction monitoring alerts and 14,000 customers requiring enhanced due diligence procedures, according to New York regulators.
“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth,“ New York Department of Financial Services (NYDFS) superintendent Adrienne Harris said in a statement.
