Two prominent crypto companies, Coinbase and Revolut, found themselves on opposite ends of the spectrum when dealing with the UK authorities recently. The UK’s Financial Conduct Authority (FCA) imposed a fine of £3.5 million ($4.5 million) on CB Payments Limited (CBPL), a subsidiary of Coinbase Group, for violations related to Anti-Money Laundering (AML). This hefty fine was the result of multiple breaches of the FCA’s guidelines, reflecting serious shortcomings in CBPL’s compliance measures.
Despite having agreed to enhance its financial crime control policies in response to a regulatory visit in October 2020, CBPL failed to implement these changes effectively. The FCA discovered that CBPL continued to onboard and serve 13,416 high-risk customers, contrary to the agreement. Shockingly, around 31% of these customers deposited a total of nearly $24.9 million on the platform, which was then utilized for crypto transactions worth a staggering $226 million on other Coinbase platforms. This blatant disregard for regulatory requirements exposed CBPL to significant operational and reputational risks.
In stark contrast to Coinbase’s woes, Revolut received encouraging news on July 25, as it was granted a restricted banking license by the UK’s Prudential Regulation Authority (PRA). This milestone moment comes after a lengthy three-year application process that finally culminated in the firm being granted the license, positioning Revolut in the mobilization stage. Francesca Carlesi, the UK CEO of Revolut, expressed the firm’s commitment to leveraging this license responsibly to enhance the financial well-being of its customers.
As a challenger bank, Revolut has been a trailblazer in the crypto industry, consistently pushing boundaries and innovating in the financial services sector. In a strategic move earlier this year, the firm launched Revolut X, a dedicated crypto exchange tailored to meet the needs of retail customers. This initiative underscores Revolut’s proactive approach to integrating cryptocurrencies into its suite of offerings, catering to the evolving preferences of the modern investor.
The contrasting experiences of Coinbase and Revolut with the UK authorities highlight the critical importance of regulatory compliance in the cryptocurrency realm. While Coinbase faced the repercussions of non-compliance with AML regulations, Revolut’s successful acquisition of a banking license underscores the value of adherence to regulatory standards. As the crypto industry continues to evolve and expand, companies must prioritize robust compliance measures to navigate the complex regulatory landscape effectively.
Leave a Reply