FCA fines crypto trading firm £3.5m in enforcement first
Comments from Kate Gee, Partner and leading crypto litigation lawyer at Signature Litigation.
Further to the news that the Financial Conduct Authority has brought its first enforcement action against a firm enabling cryptoasset trading, fining CP Payments Limited over £3.5m for repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers, Kate Gee, Partner and leading crypto litigation lawyer at Signature Litigation, share her thoughts.
Kate Gee commented: “The action against CB Payments Limited (CBPL) is the first taken by the FCA under the Electronic Money Regulations 2011. It should be considered a warning to firms to consider their financial crime controls as hugely important, in particular in the crypto sector where there are increased money laundering risks. Coinbase operates a global cryptoasset trading platform; part of it – CBPL – has been fined £3,503,546 by the FCA for repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers. Despite being subject to restrictions pursuant to a voluntary requirement (VREQ) entered into in October 2020, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers. The FCA found that the CBPL’s breaches were “the result of CBPL’s lack of due skill, care and diligence in the design, testing, implementation and monitoring of the controls put in place to ensure that the VREQ was effective. Firms that do not do enough to protect against financial crime and who fail to comply with operational restrictions in place will face scrutiny and enforcement action.”
Subscribe to the Citywealth Weekly Newsletter to learn more about Private Wealth Management.
Citywealth Spring Roundup – all features from April to July 2024
The nexus of NextGen, insights on investments and private banking, alternative assets and IFC updates. All of this and more from Citywealth's editorial output this Spring - here are the features published on citywealthmag.com in April, May, June & July 2024.
An update on trusts
In this industry update, the trusts sector takes centre stage. Citywealth speaks to experts in this area for insights on recent regulation changes, tech advances, and more.