FCA fines E-money firm £3.5m

The FCA has fined CB Payments Limited, an EMI which is part of the Coinbase Group, £3.5m for repeated breach of a requirement restricting it from offering services to high risk customers. The firm does not itself undertake crypto transactions but acts as a gateway for other group companies, and is not registered to undertake crypto-asset activities in the UK.

Following FCA concerns about the firm’s financial crime control frameworks, it entered into a VREQ in 2020 which prevented it from taking on new high-risk customers.  However, it continued to onboard and provide e-money services to over 13,000 high risk customers. In total the customers deposited around $24.9m which led to transactions over around $226m. The FCA found that these breaches resulted from the firm’s lack of due skill, care and diligence in its controls to ensure it complied with the VREQ. It had not properly designed the controls and then failed properly to monitor them.

This is the first time the FCA has taken enforcement action using its powers under the EMRs.