FCA fines crypto firm over £3.5m

Kate Gee, Partner and leading crypto litigation lawyer at Signature Litigation, has provided expert commentary on the Financial Conduct Authority’s (FCA) recent enforcement action against CP Payments Limited (CBPL). The FCA has imposed a fine of £3,503,546 on CBPL for repeated breaches of a requirement that barred the firm from offering services to high-risk customers.

Kate Gee stated, "The action against CBPL marks the FCA’s inaugural enforcement under the Electronic Money Regulations 2011. This serves as a clear warning to firms about the critical importance of robust financial crime controls, especially within the crypto sector, where risks of money laundering are heightened."

She continued, "CBPL, a subsidiary of Coinbase, was fined due to its failure to adhere to a voluntary requirement (VREQ) imposed in October 2020, which was intended to restrict services to high-risk customers. Despite these restrictions, CBPL onboarded 13,416 high-risk clients, revealing significant shortcomings in the firm’s control mechanisms."

Kate Gee added, "The FCA’s decision highlights that firms must rigorously protect against financial crime and comply with operational restrictions to avoid severe regulatory scrutiny and enforcement actions."