CB Payments Reviews & News: Investors Can Trace Their Lost Funds (Update Released)

InvestorWarnings.com has issued a new update on the CB Payments case.

Trace Your Lost Funds Here:

https://www.investorwarnings.com/warnings/get-expert-assistance-on-your-case/

Regulatory Warnings Against CB Payments

CB Payments Ltd ("CBPL") is a UK-based entity associated with the Coinbase group. It is an authorized electronic money institution (EMI) under UK law. Even though it does not directly execute crypto transactions for customers, it acts as a gateway: customers deposit fiat currency into e-money wallets via CBPL, which in turn allows them to trade crypto via other entities in the Coinbase group.

In 2024, the UK's Financial Conduct Authority (FCA) issued a Final Notice imposing a £3,503,546 penalty on CBPL, and issued regulatory warnings and findings that reflect serious compliance failures.

This case is particularly noteworthy because it is among the first times the FCA has used its powers under the Electronic Money Regulations 2011 in the context of a crypto-adjacent business. Below is a deeper look into what the regulatory findings were, what they imply, and what lessons other firms and users can draw.

What the FCA Found: Key Regulatory Warnings & Breaches
The FCA's investigation revealed multiple failures and breaches by CBPL. Some of the most significant are:
Voluntary Restrictions (VREQ) & High-Risk Customer Rule
In 2020, during a supervisory review, the FCA identified significant weaknesses in CBPL's financial crime / anti-money laundering (AML) control framework.

As part of remediation, CBPL voluntarily applied for a Voluntary Requirement (VREQ) under regulation 8 of the Electronic Money Regulations (EMRs). Under the VREQ, CBPL committed to not onboard new "high-risk" customers (institutional or retail) or provide e-money or payment services to them until its control frameworks were strengthened.

A definition of "high-risk" was negotiated with the FCA, and an automated "flag" mechanism (VREQ Flag) was to be implemented to prevent onboarding or service of such clients.

Breaches of the VREQ & Failings in Controls
Despite having the VREQ in place, the FCA found that between 31 October 2020 and 1 October 2023, CBPL repeatedly breached those restrictions. Some key findings:
CBPL onboarded or provided e-money services to 13,416 customers who should have been flagged as high risk under the VREQ.

Of those, about 31 % made deposits (nearly 12,912 deposits) with a total value around USD 24.9 million. These funds were used by the customers to execute cryptoasset transactions via other Coinbase entities, amounting to approximately USD 226 million in trading volume.

The FCA also found weaknesses in how CBPL implemented, tested, maintained, and monitored its systems:
Inadequate instructions to engineers who coded the automated checks-meaning the controls did not fully reflect the agreed VREQ criteria.

Poor or incomplete testing: pre-implementation testing was insufficient to ensure the controls would function properly in all systems or across customer onboarding paths.

Lack of comprehensive coverage: CBPL failed to consider all systems/features through which customers could be onboarded including migration of customers from other Coinbase group entities to ensure the "VREQ Flag" would catch high-risk cases.

Weak ongoing monitoring: For nearly two years, repeated and material breaches went undetected or unaddressed because CBPL did not review the effectiveness of its controls formally until much later.

Record-keeping and oversight gaps: CBPL did not maintain adequate records to show how it was complying with the VREQ, nor did it sufficiently supervise or audit internal practices.

Because of these failures, each onboarding or deposit by a high-risk customer was considered a separate breach of the VREQ.

Violation of Principle 2 & Regulatory Sanction
The FCA held that CBPL violated Principle 2 of its Principles for Businesses (which requires firms to act with due skill, care, and diligence) because of poor design, testing, implementation, and monitoring of controls.

Because the breaches were serious, persistent, and increased the risk that CBPL could be used for financial crime (especially money laundering), the FCA imposed a financial penalty of £3,503,546 under Regulation 51(1)(a) of the EMRs.

CBPL qualified for a 30 % discount on the fine under FCA's settlement procedures (because of cooperation), so the penalty was lower than what might otherwise have been imposed.

This case is notable as one of the first times the FCA has used its enforcement powers under the Electronic Money Regulations in a context connected with crypto trading.
Why This Case Matters: Broader Regulatory Lessons & Warnings.

The regulatory action against CBPL carries important warnings-not just for Coinbase or CB Payments, but for the wider fintech/crypto/payments industry.

1. Regulatory Pressure Is Increasing on Crypto-Adjacent Firms
Even if a firm does not directly trade crypto, if it plays a role in fiat-to-crypto pathways (payments, custodial wallets, onramps), regulators may scrutinize its AML / compliance regime very closely. The CBPL case shows that authorities are willing to use their powers to hold gateway firms accountable.

2. Voluntary Agreements Mean Legal and Operational Risk
Voluntary commitments (like the VREQ) are not just symbolic. They create enforceable obligations. Breaching them, even inadvertently or due to system gaps, can lead to significant sanctions.

3. Technical Implementation & Monitoring Matter as Much as Policy
Regulators expect that firms will not only agree to compliance requirements but also design, test, document, monitor, and review them thoroughly. Gaps in system implementation, oversight, or record-keeping are material.

4. Persisting Weaknesses Escalate Regulatory Risk
CBPL had been warned about weaknesses; repeated breaches, delayed reviews, and inadequate remediation made the regulatory action harsher. Regulators may escalate from guidance to warning fines if firms do not act swiftly and comprehensively.

5. Transparent Cooperation May Mitigate Punishment
CBPL's cooperation with the FCA earned it a discount. This underlines that constructive engagement with regulators, early admission of issues, and remediation efforts can reduce penalties.

The regulatory warnings and enforcement action against CB Payments Ltd mark a key moment in the regulation of firms linked to crypto infrastructure. The FCA's findings show that simply being part of the crypto space is no excuse for weak controls-even non-trading entities like payment gateways are held to high standards.

For firms operating in this space, the CBPL case is a stark reminder: compliance systems, technical implementation, monitoring, documentation, and remediation must all be robust and actively maintained. For users and investors, it underscores the importance of dealing with transparent, well-regulated platforms and being vigilant about the potential risks underlying the infrastructure.

Trace Your Lost Funds Here:

https://www.investorwarnings.com/warnings/get-expert-assistance-on-your-case/

Facts About CB Payments

CB Payments Ltd (CBPL) is a private limited company based in the United Kingdom and part of the Coinbase group's infrastructure. Incorporated on 29 July 2015 under company number 09708629, it is registered at The Scalpel, 18th Floor, 52 Lime Street, London. Although its formal classification includes "data processing, hosting and related activities," in practice it operates as an electronic money and payment services firm tied closely to Coinbase's global crypto operations.

CB Payments is authorized by the UK Financial Conduct Authority (FCA) as an electronic money institution, meaning it can issue e-money, safeguard customer funds, and act as a payments gateway. In Coinbase's structure, CBPL does not directly execute crypto trades but plays a crucial role as a fiat-to-wallet gateway. Customers deposit traditional currency with CB Payments, which then feeds into other Coinbase entities where crypto trading and custody take place.

Following Brexit, the company no longer benefits from EU "passporting" rights and has since sought new authorizations, including securing a Virtual Asset Service Provider (VASP) registration in the UK in 2025. While CB Payments is obliged to safeguard customer funds by keeping them segregated, these funds are not covered by traditional deposit guarantee schemes, which is an important distinction for users.

Financially, CB Payments is a sizeable entity. In 2023, it reported total assets of approximately €401.81 million, though this represented a sharp decline of about 51 percent compared to the prior year. That year, the company posted a net income of around €2.62 million and had an average headcount of 144 employees. Despite these solid financial figures, its operations have not been without controversy.

In July 2024, the FCA issued its first enforcement action under the UK's Electronic Money Regulations 2011 against CB Payments, imposing a fine of £3,503,546. The case stemmed from a Voluntary Requirement (VREQ) agreed in October 2020, under which CB Payments committed not to onboard or provide services to high-risk customers until it had improved its anti-money laundering controls.

Despite this, between late 2020 and October 2023, the firm allowed 13,416 high-risk customers to access its services. Roughly one-third of those clients deposited nearly USD 25 million, which in turn facilitated more than USD 226 million worth of crypto transactions across the Coinbase group.

The FCA's investigation found significant shortcomings in CB Payments' control framework, including inadequate coding of the automated "VREQ flag," insufficient testing before implementation, failure to account for all onboarding routes, and weak ongoing monitoring. As a result, breaches went undetected for nearly two years. The regulator concluded that CB Payments had breached Principle 2 of its Principles for Businesses by failing to act with due skill, care, and diligence. While the firm cooperated with the FCA and received a 30 percent reduction in its fine, the case highlighted serious risks in how technical compliance is managed within fintech and crypto-adjacent firms.

The significance of CB Payments lies not only in its role as Coinbase's UK payments arm but also in the precedent set by regulatory enforcement. It demonstrates that even firms operating on the fiat gateway side of crypto services are subject to rigorous oversight and heavy penalties if their compliance systems fail. With its new VASP registration, CB Payments is preparing to play a bigger role in the UK's crypto landscape, but it will do so under heightened scrutiny from regulators and the market alike.

Trace Your Lost Funds Here:

https://www.investorwarnings.com/warnings/get-expert-assistance-on-your-case/

Things To Consider When Investing Online

Online investing has transformed how people grow their wealth, offering instant access to global markets, countless investment products, and user-friendly platforms. From stocks and bonds to cryptocurrencies and exchange-traded funds (ETFs), opportunities are vast and varied. But with convenience also comes risk. Before committing your money, it's essential to weigh several key factors that can make the difference between financial growth and costly mistakes.

Clarify Your Financial Goals
Every investment should be tied to a purpose. Are you saving for retirement, funding a child's education, or simply looking to build wealth over time? Long-term goals allow for greater risk tolerance, while short-term goals may require safer, more liquid investments. Defining your objectives ensures your portfolio is aligned with your needs.

Choose the Right Platform
Selecting a reliable platform is one of the most critical steps in online investing. Make sure the broker or exchange is properly regulated in your jurisdiction, as this determines the level of investor protection available. Examine its security measures such as encryption, two-factor authentication, and fund-segregation practices. Fees also matter-look beyond headline trading commissions to check for hidden withdrawal or account maintenance costs. Finally, test the user interface and customer support, as both can affect your investing experience.

Do Your Research
One of the biggest traps in online investing is following hype or "hot tips." Always investigate before you invest. Study company reports if buying stocks, review whitepapers and project teams when exploring cryptocurrencies, and check historical performance for funds or ETFs. A disciplined approach to research helps filter out frauds, overvalued assets, and unsustainable promises.

Diversify Your Portfolio
Placing all your money in one stock, one coin, or one sector exposes you to unnecessary risk. A well-diversified portfolio spreads investments across different asset classes (equities, bonds, commodities, and digital assets), geographies, and industries. Diversification cushions your portfolio against sudden downturns in any single area.

Manage Risk Wisely
All investments carry risk, and online platforms often make it easy to invest impulsively. To protect yourself, never invest more than you can afford to lose, and keep an emergency fund separate from your investment accounts. Use tools like stop-loss orders to control potential losses, and avoid excessive leverage, which can magnify both profits and losses.

Be Alert to Frauds
The online investment world is fertile ground for fraud. Beware of platforms promising guaranteed returns, high-pressure sales tactics, or unregistered services. Cryptocurrency markets in particular are prone to "pump-and-dump" schemes and fraudulent tokens. If an opportunity sounds too good to be true, it probably is.

Understand Taxes and Regulations
Investment gains often come with tax obligations. Profits from stocks, crypto, and other assets may be subject to capital gains taxes, while dividends and interest are typically taxable income. Since tax rules vary widely across jurisdictions, consult a professional or review your country's guidelines to avoid unexpected liabilities.

Keep Learning and Stay Informed
Online investing is not a "set and forget" activity. Economic conditions, market trends, and regulations are constantly changing. Regularly monitor your portfolio, read credible financial news, and continue expanding your knowledge through courses, books, or investment communities. Being proactive helps you adapt to changing circumstances and seize better opportunities.

Conclusion
Online investing has lowered barriers and empowered millions of individuals to build wealth. Yet, it also requires discipline, vigilance, and continuous learning. By setting clear goals, choosing trustworthy platforms, diversifying your investments, managing risks, and staying vigilant against frauds, you can capitalize on the opportunities of online markets while safeguarding your financial future. Remember: investing is not about chasing quick wins, but about building long-term security and resilience.

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About InvestorWarnings.com

InvestorWarnings.com is a leading platform that exposes fraudulent investment schemes in the cryptocurrency, forex, and financial sectors. Their mission is to educate consumers, assist victims of fraud, and prevent further financial schemes through awareness and expert guidance.

This release was published on openPR.