The fine was issued after regulators discovered that the company had allowed its customers to open accounts without conducting sufficient background checks, which could potentially violate anti-money laundering legislation.
The company's failure to adequately identify customers and monitor their activity for suspicious activity was initially identified during a routine examination in 2020, but regulators determined that the company's issues persisted, leading to a formal investigation in 2021.
Coinbase faced a backlog of over 100,000 alerts about potentially suspicious customer transactions that were not being examined, and it was found that the company had only conducted basic know your customer checks before allowing people to open accounts.
Coinbase New York regulators fine compliance program anti-money laundering customer identification suspicious activity routine examination investigation customer transactions know your customer checks
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