Coinbase Europe has been fined 21.5 million euros by the Central Bank of Ireland for a systems error that left more than 30 million transactions worth 176 billion euros unmonitored against money laundering over 12 months.
The Central Bank of Ireland has imposed a fine of €21.5 million ($24.7 million) on Coinbase Europe Limited for serious breaches of its anti-money laundering and counter-terrorism financing transaction monitoring obligations between April 2021 and March 2025. This is one of the most notable fines in the digital asset sector in Europe, reflecting the regulator's growing interest in compliance in the cryptocurrency industry.
According to the announcement published on Thursday, Coinbase Europe, as a virtual asset service provider, is responsible for continuously monitoring customer transactions and immediately reporting any suspicious activity to the Irish Financial Intelligence Unit and the Irish Revenue Service as required by the Criminal Justice Act 2010. However, due to a system configuration error, more than 30 million transactions with a total value exceeding 176 billion euros ($202.8 billion) were left unmonitored over the 12 months, representing approximately 31% of the company's total activity during the breach period.
Coinbase Europe spent nearly three years combing through this backlog of data and ultimately filed 2,708 late suspicious transaction reports. These reports involved a wide range of serious illegal activities including money laundering, fraud, drug trafficking, cyberattacks, and child sexual exploitation. The company also failed to conduct additional checks on another 184,790 transactions as required, indicating significant deficiencies in internal controls.
Settlement and warning from regulator
In a settlement agreement signed on November 5, the Central Bank of Ireland initially imposed a fine of €30.7 million ($35.4 million), which was later reduced by 30% to €21.5 million due to the settlement mechanism and Coinbase Europe's cooperation in the investigation. The fine is now awaiting approval by the Irish Supreme Court.
Deputy Governor Colm Kincaid stressed the importance of transaction monitoring systems in assisting law enforcement agencies in combating financial crimes. He warned that cryptocurrencies, with their anonymity and cross-border capabilities, are particularly attractive to criminals, so businesses providing related services must maintain strict controls and promptly notify the Central Bank of any system failures.
Coinbase explained that the issue stemmed from three programming errors that caused five of its 21 monitoring scenarios to only analyze a portion of customer activity in 2021-2022. The company said it fixed the error within two to three weeks of discovery and pledged to strengthen its internal testing, monitoring, and governance processes to build the world's most secure and compliant platform.
