WASHINGTON (Reuters) -U.S.-based cryptocurrency exchange Coinbase Inc has reached a $100 million settlement with New York’s Department of Financial Services (DFS), the exchange and the regulator said in statements on Wednesday.

The settlement, which includes a $50 million penalty, caps the regulator’s investigation into the firm’s compliance with requirements to prevent money laundering.

The department found Coinbase treated its onboarding requirements for customers as a “simple check-the-box” and had not done sufficient background checks, the regulator said.

“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth. That failure exposed the Coinbase platform to potential criminal activity,” said New York DFS Superintendent Adrienne Harris.

The exchange has addressed the problems, said Paul Grewal, Coinbase’s chief legal officer, in a statement.

In a blog post, Coinbase said the investigation centered on the company’s compliance program circa 2018 and 2019, as well as the compliance backlogs as the exchange grew in 2021.

“We took NYDFS’s concerns seriously and have taken substantial measures to address these historical shortcomings,” the blog post said.

Coinbase, a publicly traded firm and one of the largest global crypto exchanges, will pay another $50 million to boost compliance efforts aimed at blocking potential criminals from using the exchange, the company said. The deal also requires Coinbase to work with a third-party monitor.

The New York Times first reported the settlement.

Coinbase has been under scrutiny from DFS and other regulators. It has previously disclosed receiving investigative subpoenas and requests from the U.S. Securities and Exchange Commission for documents and information.

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(Reporting by Susan Heavey, Hannah Lang and Jonathan StempelAdditional reporting and writing by Chris PrenticeEditing by Mark Potter and Lisa Shumaker)