Scaling the Compliance Back Office at Coinbase During Hyper-Growth: A First-Hand Experience

Last day in AZ killing time and reflecting

Introduction

As the cryptocurrency world experienced unprecedented growth in 2017, Coinbase, one of the leading platforms for trading digital assets, was at the center. As the user base grew exponentially, the company faced numerous challenges, including scaling its compliance back office to ensure regulatory adherence and maintain a smooth user experience. In this blog post, I will recount my journey of building a robust compliance back office at Coinbase during its hyper-growth period, including the unforgettable experience of flying to Arizona to train and onboard 30+ analysts from a specialized AML firm and assisting in the setup of an in-house back office team in Portland while implementing a leading CRM platform.

Building a Compliance Back Office at Coinbase

The challenge of scaling the compliance back office at Coinbase was a challenging one. The company had to stay ahead of the curve while strictly adhering to regulatory requirements, anti-money laundering (AML), and know-your-customer (KYC) policies. It was essential for Coinbase to not only scale its operations but also to build a strong compliance team that could handle the increasing volume of transactions and users on the platform. The first step in building the compliance back office was creating a transparent and efficient structure. This involved developing a comprehensive framework for managing risks, implementing strict policies and procedures, and investing in cutting-edge technology to monitor transactions and user activity. Additionally, we needed to establish strong partnerships with external providers to ensure our processes were efficient and reliable.

Partnering with a Specialized AML Firm and Onboarding 30+ Analysts at a time

One such partnership was with a specialized AML firm that provides AML and risk management services. As part of our expansion, we decided to onboard over 30 analysts from the firm to strengthen our compliance team and enhance our ability to monitor transactions and user behavior effectively.

To facilitate this partnership, I had the opportunity to fly to Arizona to train and onboard the new analysts. This was a pivotal moment in my journey, as it allowed me to engage with a talented group of professionals eager to contribute to the success of Coinbase. The intense and comprehensive training sessions covered various compliance aspects, including AML regulations, risk management, and transaction monitoring.

Assisting in the Setup of the Portland Back Office Team

In parallel with our partnership with the specialized AML firm, we also initiated the process of setting up an in-house back office team in Portland. This move aimed to ensure that we had a solid team to handle the company's growing needs and provide localized support to our customers. The process involved:

• Scouting for talent.

• Setting up a dedicated office space.

• Implementing the necessary infrastructure to enable efficient communication and collaboration.

As part of my role, I assisted in setting up the Portland back office team, helping them establish the necessary processes and resources to excel in their roles. This support played a crucial role in ensuring the smooth integration of the Portland team into our overall compliance infrastructure.

Implementing a Leading CRM Platform

Simultaneously, as we built the Portland team, we also embarked on the task of implementing a leading CRM platform. This platform allowed us to streamline customer interactions, enabling our compliance team to effectively manage and track user activity. The platform also facilitated seamless communication between the various groups at Coinbase, ensuring that all departments could work cohesively and efficiently.

Taking Ownership of the Relationship with the Specialized AML Firm

After the training sessions in Arizona and the successful setup of the Portland back office team, it was crucial to maintain a strong working relationship with the specialized AML firm to ensure seamless communication and collaboration. I took ownership of this relationship, ensuring that the newly onboarded analysts were integrated into our existing compliance team smoothly and had access to the necessary resources.

As part of my role, I frequently liaised with the AML firm's management to discuss progress, share feedback, and address any concerns or challenges. This ongoing relationship played a vital role in our ability to effectively scale the compliance back office during the hyper-growth period and meet our regulatory obligations.

Conclusion

The experience of building and scaling a compliance back office at Coinbase during its hyper-growth period in 2017 was both challenging and rewarding. By establishing a solid partnership with AMLRS and onboarding a talented team of analysts, we successfully managed the increased volume of transactions and users on the platform. Through effective communication, training, and teamwork, we built a robust and efficient compliance infrastructure that contributed to the overall success of Coinbase in those transformative years.