Coinbase is vulnerable to money laundering, drug trafficking and fraud, financial regulators in New York said Wednesday in a settlement that requires the cryptocurrency exchange to strengthen its security.
New York's Department of Financial Services (NYDFS) found that Coinbase has done a poor job at vetting new customers and examining transactions on the exchange to ensure they comply with state banking, cybersecurity and other rules. Under the settlement, the company will pay a $50 million penalty and agreed to spend another $50 million over the next two years to address shortcomings identified by the agency.