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Langgam Pos - The Financial Conduct Authority (FCA) in the UK has announced a fine of £3.5 million (approximately IDR 73.4 billion) against CB Payments Ltd, a subsidiary of Coinbase. The fine was imposed due to the subsidiary's breach of operating conditions.
"CB Payments Limited (CBPL) has been fined £3,503,546 by the Financial Conduct Authority (FCA) for repeatedly breaching requirements that prevent the company from offering services to high-risk customers," the FCA stated, as reported by News.bitcoin.com on Saturday (July 26, 2024).
CB Payments Limited, also known as "Coinbase Payments," does not directly handle cryptocurrency transactions for customers.
Instead, the company acts as a gateway for customers to trade cryptocurrencies through other entities within the Coinbase Group.
It has been reported that CB Payments Limited is currently not registered to conduct cryptocurrency activities in the UK.
In October 2020, CB Payments Limited agreed to voluntary terms with the FCA, prohibiting it from accepting new high-risk clients until it resolved its compliance issues.
"Despite these restrictions, CB Payments Limited accepted and/or provided electronic money services to 13,416 high-risk customers," the FCA revealed.
The FCA further disclosed that approximately 31% of these customers deposited funds totaling around USD 24.9 million, which were used for withdrawals and subsequently to conduct several cryptocurrency transactions through other Coinbase Group entities, totaling approximately USD 226 million.
The UK regulator explained that this violation, due to inadequate control measures, went undetected for nearly two years.
Therese Chambers, FCA’s co-executive director, highlighted the severe financial crime risks in the cryptocurrency sector and the necessity for companies to maintain robust controls.
Crypto Company Bankruptcy: Genesis Set to Pay IDR 330.4 Billion Fine
Previously, the bankrupt cryptocurrency lending firm Genesis Global Capital has agreed to pay a civil fine of USD 21 million (approximately IDR 330.4 billion, assuming an exchange rate of IDR 16,264 per USD) to settle allegations from the U.S. Securities and Exchange Commission (SEC).
Genesis illegally sold securities through a crypto lending program without registering them with the SEC. The settlement resolves the January 2023 lawsuit filed by the SEC against Genesis and Gemini over their joint crypto lending program.
This settlement is part of a series of enforcement actions taken by the SEC against major firms in the cryptocurrency sector. Genesis, which filed for bankruptcy in January 2023, is a subsidiary of Digital Currency Group (DCG).
“Genesis operated a lending program that collected billions of dollars in cryptocurrency assets from investors,” said the SEC in its report, as quoted by Yahoo Finance on Monday (April 22, 2024).
Genesis had previously frozen customer fund withdrawals in November 2022, following the collapse of the FTX cryptocurrency exchange. Under the settlement detailed on Tuesday, the SEC stated that no penalties would be accepted until other claims, including those from retail investors, are resolved by the bankruptcy court.
Mutual Lawsuits
Earlier, Genesis and Gemini sued each other at the end of 2023. Genesis filed a lawsuit against Gemini Trust Co to recover nearly USD 690 million (approximately IDR 10.8 trillion).
Genesis claimed that Gemini’s withdrawal from Genesis in the months leading up to the company's Chapter 11 filing in January 2023 was unprecedented and caused significant losses detrimental to other crypto lending creditors.
The lawsuit exacerbated the bankruptcy dispute between Genesis and Gemini, which had collaborated on the Gemini Earn program allowing clients to earn around 8% interest on their digital asset holdings.
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