Key Highlights:
- The Central Bank of Ireland fined Coinbase for failing to properly monitor transactions and comply with anti-money laundering rules.
- Over 30 million transactions, worth more than €176 billion ($192B), were inadequately checked and took three years.
- Late checks triggered 2,708 suspicious reports, flagging fraud, money laundering, cyberattacks, and child exploitation.
The Central Bank of Ireland has fined Coinbase Europe €21,464,734, around $24 million, for failing to monitor transactions properly and respect anti-money laundering requirements.
The bank found serious flaws in Coinbase Europe’s transaction monitoring system, leaving over 30 million transactions, worth more than €176 billion (about $200 billion), insufficiently monitored over 12 months. The transactions represented roughly 31% of all Coinbase Europe transactions during that period.
Suspicious transactions and delays
Coinbase took almost three years to fully review the affected transactions. This late monitoring led to 2,708 Suspicious Transaction Reports being submitted to the Financial Intelligence Unit. The reports flagged potential criminal activity, including money laundering, fraud, drug trafficking, cyberattacks, and even child sexual exploitation.
Coinbase acknowledged the breaches, admitting it had failed to monitor 30,442,437 transactions and lacked sufficient internal controls to prevent money laundering and terrorist financing, and that nearly 185,000 transactions required additional checks.
The two sides settled, with the Central Bank initially fining Coinbase Europe €30,663,906 (around $33.4 million). A 30% discount reduced the fine to the current amount. The sanctions have been accepted but still require High Court confirmation.
Colm Kincaid, deputy governor of the Central Bank, emphasized the importance of robust monitoring systems in preventing financial crime. He noted that failures in such systems create opportunities for criminals, and crypto’s anonymity and cross-border features make it particularly attractive for illicit activity.
Kincaid added, “This is why it is especially important that firms engaged in crypto services have robust controls in place to identify and report suspicious transactions.” He stressed that any system failures must be reported promptly to the regulator so risks can be properly managed and mitigated.
Coinbase’s past penalties
This is not the first time Coinbase has been fined. The firm has faced regulatory fines in both Russia and the UK for breaches related to data localization and financial crime controls.
In 2023, a court in Moscow fined Coinbase 1 million rubles for failing to localize the data of its Russian clients, an offense attributed to Coinbase Ireland Ltd.
The first FCA sanction of its kind in the UK crypto sector was given to Coinbase’s CB Payments Limited last July 2024 for taking high-risk customers in violation of a 2020 financial crime agreement, involving $24.9 million in deposits and $226 million in transactions.
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