Coinbase
New York, NY
On January 4, 2023, the New York Department of Financial Services (NYDFS) issued a consent order against Coinbase, a virtual currency business entity licensed under NY financial regulations. The action cited significant deficiencies in Bank Secrecy Act / Anti-Money Laundering (BSA/AML) compliance, Know Your Customer and Customer Due Diligence (KYC/CDD) procedures, transaction monitoring systems, and OFAC sanctions screening. The consent order required Coinbase to engage an independent consultant and implement comprehensive remediation measures. This followed a prior Memorandum of Understanding (MOU) issued in February 2022 addressing similar concerns. While no suspension or license revocation was imposed, the enforcement action signals heightened NYDFS scrutiny of virtual currency and payment-adjacent entities, relevant to BaaS providers that partner with or service crypto platforms.
Verified from source: The page is a PDF document hosted on the NYDFS enforcement actions page with URL containing 'ea20230104_coinbase', confirming an enforcement action dated January 4, 2023 against Coinbase by NYDFS. The PDF content is not fully readable as raw binary, but the URL structure and hosting on dfs.ny.gov confirms the action.
- BaaS providers servicing crypto or virtual currency platforms face heightened compliance expectations from NYDFS
- Consent orders with independent consultant requirements signal that regulators expect demonstrable remediation, not just policy changes
- Sponsor banks facilitating crypto-related transactions should review their own BSA/AML and OFAC frameworks in light of this action