Two crypto companies, Coinbase and Revolut, have suffered contrasting fortunes at the hands of British authorities in the past week.
Coinbase fined
The UK Financial Conduct Authority (FCA) has fined CB Payments Limited (CBPL), a subsidiary of Coinbase Group, £3.5 million ($4.5 million) for money laundering-related offences.
In a notice dated July 23, the FCA explained that the fine was the result of repeated violations of the guidelines by CBPL. Initially the fine was £5 million, but due to a settlement discount it was reduced by 30% to £3.5 million.
In October 2020, the CPP agreed to strengthen its policies to combat financial crime following a visit from the regulator. This agreement included a commitment not to accept new high-risk customers without adhering to FCA guidelines.
However, the FCA found that CBPL continued to recruit and serve 13,416 high-risk customers. About 31% of these customers deposited nearly $24.9 million on the platform, which was then used on other Coinbase platforms for crypto transactions totaling $226 million.
Consequently, the FCA determined that CBPL failed to comply with the recommended controls. The regulator stated:
“The deficiencies significantly increased the risk that financial crime could be facilitated by the company at a time when the Authority had informed the CBPL that its systems and controls were not fully effective and required remediation.”
Revolut license
On July 25, Revolut announced that it had received a limited banking license from the UK Prudential Regulation Authority (PRA), which oversees the banking sector.
The license comes more than three years after Revolut first applied in 2021 and initially places the company in the mobilization phase. Francesca Carlesi, UK CEO of Revolut, said:
“Being a bank in Britain is a huge responsibility and we will work relentlessly to provide products and services that improve the financial lives of everyone who uses Revolut.”
Revolut is a challenger bank that has made significant strides in the crypto industry. In May, the company launched Revolut
Notably, the company recently released its financial statements for last year, which show that sales exceeded $2 billion and recorded a pre-tax profit of $545 million.