- Coinbase failed to monitor €176B in transactions, exposing risks of financial crime.
- The Central Bank imposed a €21.5M fine after major AML system faults between 2021–2025.
- Coinbase corrected coding errors and strengthened compliance to prevent future breaches.
The Central Bank of Ireland has fined Coinbase Europe Limited 21.5 million euros due to the violation of the anti-money laundering (AML) and counter-terrorist financing (CFT) regulations between April 2021 and March 2025. The regulator alleged the company did not oversee millions of transactions of customers, making the system prone to criminal misuse. Coinbase Europe, a subsidiary of the Coinbase Group, has owned up to the failure to meet the compliance requirements and has consented to pay the case. The fine is the first regulatory measure in the Irish crypto industry pursuant to the new accountability regime.
Central Bank Cites Major Transaction Monitoring Failures
The Central Bank stated that Coinbase Europe failed to properly monitor 30,442,437 transactions worth over €176 billion, representing about 31% of the company’s total transactions during the fault period. The regulator found that the company had three coding errors in the Transaction Monitoring System that resulted in the failure to analyze the transactions associated with crypto addresses that contained special characters. Consequently, the suspicious activity had not been noticed in months.
Coinbase Europe took almost three years to reprocess the affected transactions and also review them. After such a review, the company submitted 2,708 Suspicious Transaction Reports (STRs) to the Financial Intelligence Unit and Revenue in Ireland. These reports demonstrated suspicions associated with major criminal actions like money laundering, hacking, drug trade, and child abuse. The Central Bank indicated that such inadequacies hamper the efficiency of the AML mechanism in Ireland and postpone important investigations.
Coinbase Europe Admits Breaches and Strengthens Controls
Coinbase Europe accepted the violations of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and accepted the undisputed facts settlement procedure with the control authority. The Central Bank originally calculated a fine of €30.6 million and under the settlement scheme had to cut it by 30% to €21,464,734. The penalty will be in place after being authorized by the High Court.
Colm Kincaid, the Deputy Governor, stated that the law enforcement relies on the regulated firms to keep track of the transactions in real-time and report on suspicious transactions quickly. He pointed out that the speed, anonymity and transnationalism of crypto makes it especially appealing to criminals and heighten the necessity of robust compliance systems. Since then, Coinbase Europe has refined the errors in the system, increased its internal controls, and reiterated its dedication to transparency and regulatory compliance.
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