Coinbase Off the Hook? 

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.

In 2017, the NYDFS had granted Coinbase a virtual currency license, also known as a BitLicense, to operate in the state of New York. However, in September 2022, the NYDFS accused Coinbase of violating several provisions of the BitLicense and requested that the company pay a $2.5 million fine.

In the settlement, Coinbase agreed to pay the fine and implement a series of changes to its compliance and money transmission practices. These changes include the appointment of a chief compliance officer, the development of a comprehensive compliance program, and the implementation of a transaction monitoring system.

Coinbase also agreed to regularly report its compliance efforts to the NYDFS and to cooperate with any future NYDFS investigations.

The settlement marks a significant milestone for Coinbase, which has faced regulatory scrutiny in the past. In 2018, the company was hit with a $13 million fine by the U.S. Commodity Futures Trading Commission (CFTC) over allegations of insider trading.

Despite these challenges, Coinbase remains a major player in the cryptocurrency industry, with millions of users and billions of dollars in trading volume. The settlement with the NYDFS should help to restore confidence in the company’s compliance practices and allow it to continue operating in the state of New York.

Shares of Coinbase rose 13 percent to $38 in midday trading.