The regulator said it was the first enforcement action against a firm which was enabling cryptoasset trading.

CBPL is part of the Coinbase Group which operates a prominent cyptoasset trading platform.

CBPL does not undertake the cyptoasset transactions for customers but acts as a gateway for customers to trade via other entities within the group.

The firm is currently not registered to undertake cryptoasset activities in the UK.

The fine follows CBPL entering into a voluntary requirement with the FCA in October 2020 which prevented the firm from taking on new high-risk customers.

According to the FCA, despite the restrictions in place, CBPL provided e-money services to 13,416 high-risk customers.

The regulator said the breaches were the result of CBPL’s, “lack of due skill, care and diligence in the design, testing, implementation and monitoring of the controls put in place” to ensure that the voluntary requirement was being met. The breaches were not discovered for almost two years due to the monitoring of compliance.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “The money laundering risks associated with crypto are obvious and firms must take them seriously.

"Firms like CBPL that enable crypto trading, need to have strong financial crime controls. CBPL's controls had significant weaknesses and the FCA told it so, which is why the requirements were needed. CPBL, however, repeatedly breached those requirements. 

“This increased the risk that criminals could use CBPL to launder the proceeds of crime. We will not tolerate such laxity, which jeopardises the integrity of our markets.”

CBPL agreed to resolve the fine, qualifying for a 30% discount from the regulator.