The U.K. branch of Coinbase has been fined £3.5 million ($4.5 million) by British regulators for failing to comply with an agreed-upon framework aimed at preventing the onboarding of “high-risk customers” within the cryptocurrency exchange.

CB Payments Limited (CBPL), a part of the Coinbase Group overseeing a global crypto trading platform, contravened a voluntary pact made with the U.K.’s Financial Conduct Authority (FCA) back in October 2020. This agreement restricted CBPL from accepting new customers categorized as high-risk, along with prohibiting the provision of services to such clients.

The FCA reported that despite the restrictions, CBPL onboarded and catered to 13,416 high-risk clients, with approximately 31% of these customers depositing around $24.9 million. These funds were utilized for withdrawals and crypto transactions through other Coinbase entities, totaling roughly $226 million.

Therese Chambers, the joint executive director of enforcement and market oversight at the FCA, expressed concerns over CBPL’s deficient controls and reiterated the necessity of the imposed requirements. Chambers emphasized that such breaches heightened the potential for criminal exploitation through money laundering, thereby endangering market integrity.

Coinbase, in response to the FCA’s findings, affirmed its deep commitment to regulatory compliance and underscored the seriousness with which it views the matter.

CBPL acknowledged unintentionally enrolling some high-risk customers between Oct. 30, 2020, and Oct. 1, 2023, accounting for a mere 0.34% of the overall new customer base during that period.

The company pledged proactive measures to bolster its controls and ensure strict adherence to regulatory obligations, with the FCA acknowledging CBPL’s cooperation with the investigation in its official notice.

For more information, you can access the original article here.