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The U.K. Financial Conduct Authority issued its first enforcement action against a cryptocurrency platform Thursday, fining a London-based affiliate of Coinbase £3.5 million for repeatedly breaching restrictions on offering services to high-risk customers.

CB Payments Limited, or CBPL, the U.K. branch of the U.S.’s largest virtual assets exchange in terms of trading volume, does not facilitate cryptocurrency transactions for customers but acts as a “gateway” for customers trading digital tokens via other entities within the Coinbase Group, the FCA said.

CBPL entered into a “voluntary requirement” with the FCA in October 2020 following “significant engagement” with the regulator over weaknesses in its anti-money laundering systems and controls, which prevented the company from taking on new high-risk customers, such as individuals located in countries with weak AML regimes, while it remedied the deficiencies.

Despite the restrictions, CBPL from October 2020 to October 2023 onboarded and provided services to almost 13,500 high-risk clients, allowing them to make withdrawals and execute cryptocurrency transactions worth a combined £175 million via Coinbase entities domiciled overseas.

“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 VREQ [voluntary requirement] was effective,” the FCA noted Thursday.