Two prominent crypto companies, Coinbase and Revolut, experienced starkly different outcomes at the hands of UK authorities in recent developments. The Financial Conduct Authority (FCA) in the UK levied a hefty fine of £3.5 million on CB Payments Limited (CBPL), a subsidiary of Coinbase Group, for breaching Anti-Money Laundering regulations. The FCA highlighted that CBPL repeatedly violated its guidelines, leading to the substantial penalty.
Despite previously agreeing to enhance its financial crime control policies following a regulatory audit in October 2020, CBPL fell short of compliance with FCA standards. The company continued to onboard and serve a significant number of high-risk customers, totaling 13,416, contrary to the agreement not to accept new high-risk clients without adhering to FCA guidance. These customers deposited nearly $24.9 million on the platform, subsequently utilized on other Coinbase platforms for crypto transactions amounting to $226 million. The FCA asserted that CBPL’s shortcomings significantly escalated the risk of financial crime facilitation, especially after being explicitly informed by the regulatory body about deficient systems and controls requiring remediation.
In a strikingly different development, Revolut announced on July 25 that it had secured a restricted banking license from the UK’s Prudential Regulation Authority (PRA), marking a significant milestone for the company. This achievement comes after more than three years since Revolut’s initial application in 2021, placing the firm in the mobilization phase. Francesca Carlesi, UK CEO of Revolut, emphasized the immense responsibility that comes with operating as a bank in the UK and pledged to tirelessly work towards providing products and services that enhance the financial well-being of Revolut users.
Revolut, known as a challenger bank, has been making notable strides in the crypto industry. In May, the company launched Revolut X, a dedicated crypto exchange catering to retail customers, further solidifying its presence and commitment to expanding its offerings in the burgeoning crypto market. The recent acquisition of the restricted banking license underscores Revolut’s ambition and determination to establish itself as a key player in the financial services landscape, particularly in the realm of digital assets and crypto trading.
The divergent trajectories of Coinbase and Revolut in the UK underscore the importance of regulatory compliance and adherence to industry standards in the fast-evolving crypto sector. While Coinbase faced penalties for overlooking AML guidelines, Revolut’s attainment of a banking license exemplifies its dedication to growth and innovation in navigating the intricate regulatory environment. As both companies continue to navigate the complexities of the crypto landscape, their contrasting experiences serve as valuable lessons for industry participants on the significance of regulatory vigilance and strategic decision-making.
Leave a Reply