TLDR
- Coinbase Europe Limited agreed to pay a $24.7 million fine to the Central Bank of Ireland.
- The fine followed failures in Coinbase’s transaction monitoring system between 2021 and 2022.
- Coinbase said the issue resulted from coding errors that affected its compliance software.
- The company detected and fixed the errors within weeks and reviewed all affected transactions.
- Coinbase reported around 2,700 suspicious transactions totaling $15 million as required under AML laws.
Coinbase Europe Limited has agreed to pay a €21.5 million ($24.7 million) fine to the Central Bank of Ireland. The settlement follows failures in the company’s transaction monitoring system between 2021 and 2022. Coinbase said it detected the technical errors internally and corrected them within weeks.
The Central Bank stated the fine was based on Coinbase’s average annual Irish revenue of about $480 million between 2021 and 2024. Regulators said the exchange failed to properly screen some transactions for suspicious activity. Coinbase emphasized that it fully cooperated with the regulator throughout the process.
The company explained that the monitoring issue stemmed from coding errors in its compliance software. These flaws caused partial screening of transactions during automated reviews. Coinbase confirmed it later conducted a full re-examination of the affected activity.
Coinbase Flags 2,700 Suspicious Transactions
Coinbase reviewed around 185,000 transactions conducted during the affected period. Out of these, approximately 2,700 were reported as suspicious, totaling around $15 million. The firm clarified these reports did not confirm criminal activity but complied with Irish AML rules.
According to the Irish Independent, the flagged transactions represented about 31% of Coinbase Europe’s total processed volume. Their total estimated value exceeded $202 billion during that time. Coinbase said it took “swift corrective action” once the failures were identified.
The company stated the issue involved three coding errors across five of its 21 monitoring “scenarios.” These errors prevented correct screening when crypto wallet addresses contained special characters. Coinbase said those scenarios have since been rebuilt and tested extensively.
Regulatory Response and Future Measures
The Central Bank emphasized the importance of reliable AML systems for all registered virtual asset service providers. It said Coinbase must ensure robust compliance monitoring to meet future obligations. Regulators added that technical oversights of this nature pose potential systemic risks.
Coinbase said it has implemented stricter pre-deployment testing and ongoing quality reviews of its transaction systems. It has expanded scenario testing to identify high-risk crypto activity. The company confirmed these upgrades are now fully operational across its European operations.
“Coinbase recognizes the importance of effective AML procedures,” the company said in its statement. “We take our obligations under AML legislation very seriously.”
The firm said it continues to work closely with regulators in all operating regions. Coinbase established its Dublin office in 2018 to serve as a European base. The company later received an e-money license in 2019 from the Central Bank. Since then, Coinbase has expanded its workforce and compliance infrastructure in Ireland.
In 2023, Coinbase selected Ireland as its European crypto hub ahead of the MiCA regulatory rollout. The new framework will allow Coinbase to operate across all 27 EU member states under a single license. The exchange said its strengthened systems position it for compliance under the new regime.
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