Coinbase Europe Fined $25 Million for Failing Anti-Money Laundering Obligations

TLDR

• Coinbase Europe failed to monitor 30 million transactions worth €176 billion.
• The company filed over 2,700 late suspicious transaction reports.
• Coinbase Europe admitted to coding errors in its AML monitoring system.
• The €21.5 million fine was reduced from an original €30.7 million penalty.

The Central Bank of Ireland has fined Coinbase Europe Limited €21.5 million (approximately $24.7 million) for failing to meet its anti-money laundering (AML) and counter-terrorist financing obligations. The breach involved the company’s failure to properly monitor over 30 million transactions, totaling more than €176 billion, between April 2021 and March 2025. This fine is a result of issues in Coinbase Europe’s transaction monitoring system, which were later addressed by the company after extensive internal reviews.

Coinbase Europe’s Monitoring System Failure

The fine follows a review by the Central Bank of Ireland into Coinbase Europe’s transaction monitoring procedures. The investigation revealed that a system configuration error left over 30 million transactions unmonitored for 12 months.

These transactions, valued at over €176 billion, represented around 31% of Coinbase Europe’s total activity during the period. The company acknowledged that this failure was a serious breach of its regulatory obligations and resulted in delayed filing of suspicious transaction reports.

As a virtual asset service provider, Coinbase Europe is required to continuously monitor transactions and report any suspicious activities. However, due to faults in its monitoring system, Coinbase Europe failed to meet this requirement. This lack of adequate oversight exposed the company to potential misuse by criminals involved in activities such as money laundering or terrorism financing.

Late Suspicious Transaction Reports Filed

Coinbase Europe’s failure to monitor transactions led to a backlog of reports. The company filed 2,708 late suspicious transaction reports, identifying potential issues such as fraud, cyberattacks, and other financial crimes. Despite this delay, Coinbase said it took swift action once the issue was identified. After discovering the errors in its monitoring system, the company conducted a thorough review of the transactions and filed the reports in accordance with regulatory requirements.

The investigation also found that Coinbase neglected additional checks on nearly 185,000 other transactions, further contributing to the breaches. The Central Bank of Ireland expressed concern that such failures in transaction monitoring allowed criminals to exploit gaps in the system, potentially facilitating illegal activities.

Coinbase’s Response to the Fine

In response to the fine, Coinbase Europe accepted responsibility for the breaches and the €21.5 million penalty. The company stated that the issues arose from coding errors in its transaction monitoring system, which affected five out of 21 monitoring scenarios. Once identified, the company fixed the errors within two to three weeks and reviewed all impacted transactions.

Coinbase emphasized that it has since taken steps to strengthen its monitoring systems, improve testing procedures, and increase oversight to prevent similar issues in the future. The company reassured customers and regulators that it remains committed to maintaining robust anti-money laundering measures.

“We recognize the importance of effective AML procedures and take our obligations under AML legislation and regulatory guidance very seriously,” Coinbase said in a statement.

Settlement and Further Actions

The Central Bank of Ireland imposed a fine of €30.7 million ($35.4 million), which was reduced to €21.5 million following a 30% settlement discount. Coinbase Europe has accepted the settlement, pending confirmation by the High Court.

The Central Bank’s Deputy Governor for Consumer and Investor Protection, Colm Kincaid, reiterated the importance of firms in the cryptocurrency sector having reliable systems to monitor transactions. He warned that system failures in financial institutions could provide criminals with opportunities to avoid detection.

Despite the penalties, Coinbase has cooperated with the regulatory authorities throughout the investigation. The company has since strengthened its compliance framework to prevent similar issues from arising again. However, the fine serves as a reminder of the need for effective transaction monitoring and robust AML practices within the cryptocurrency industry.

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