FCA Coinbase ‘One-Off’ Fine is Not a Crypto Industry Crackdown
The Financial Conduct Authority (FCA) enforcement action against the UK-based arm of crypto exchange Coinbase was cited to be a “one-off,” according to legal expert Charlotte Tregunna.
The enforcement action stirred cryptocurrency investors, fearing a potential UK regulatory crackdown akin to that of the US SEC after the Coinbase subsidiary CB Payments Limited (CBPL) was fined.
Concerns arose after CBPL received a $4.5 million fine on July 25 for breaching a voluntary user agreement with the FCA to prevent it from onboarding “high-risk” customers.
We've fined CB Payments Ltd £3,503,546 for repeatedly breaching a requirement that prevented the firm from offering services to high-risk customers. #cryptoassets #CryptoTrading #FinancialRegulation https://t.co/etahpXO3q3
— Financial Conduct Authority (@TheFCA) July 25, 2024
This fine is particularly concerning as it marks the first instance of FCA enforcement based on the Electronic Money Regulations 2011 Act.
While some investors worry this could signal more scrutiny for other cryptocurrency exchanges in the UK , legal experts dismiss the possibility of a crypto industry crackdown.
The case between the FCA and CBPL suggests a “one-off” enforcement action rather than a tougher stance against the crypto space, according to Charlotte Tregunna, partner at business crime law firm Peters & Peters.
Tregunna cited the fines as a “last resort,” noting that CBPL had over three years to address issues with Coinbase’s systems and controls. She added:
“It’s an obvious breach and the FCA can’t really ignore it if they were given adequate time to resolve it.”
The legal expert also called the FCA’s involvement a “rare occurrence,” noting that firms usually resolve such situations,
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