Coinbase has paid a $24.7 million fine to the Central Bank of Ireland after system errors were identified in crypto transactions. The issue came from coding errors in Coinbase’s system between 2021 and 2022, which caused it to miss-check some transactions for suspicious activity.
The bank stated that the error created gaps in Coinbase’s anti-money laundering (AML) controls. These gaps meant that some transactions were not properly screened, which could have allowed risky activity to go unnoticed. Reports indicated that the affected transactions accounted for approximately one-third of Coinbase Europe’s total activity during that period.
Coinbase identified the issue through internal tests, resolved it promptly, and reviewed all affected transactions. The company later filed approximately 2,700 reports of suspicious transactions, worth $15 million. None of these were proven to be linked to crime, but the company was still found to have weak controls.
The Central Bank fined Coinbase €21.5 million ($24.7 million) under Ireland’s laws to fight money laundering. The fine is one of the biggest AML penalties ever given in Ireland. It was based on Coinbase’s average annual income in the country, which was about $480 million between 2021 and 2024.
After the issue, Coinbase improved its systems to prevent similar problems in the future. The company implemented stricter testing, enhanced monitoring tools, and more rigorous review processes to ensure that every transaction is thoroughly reviewed. Coinbase stated that it understands the importance of robust AML procedures and is working closely with regulators.
Coinbase opened its Dublin office in 2018 and established Ireland as its primary European base in 2023. This move helps it prepare for the new EU crypto rules under the Markets in Crypto-Assets (MiCA) regulation, which will allow it to operate across all 27 EU countries.
The penalty highlights the growing regulatory scrutiny on crypto firms. Additionally, it serves as a warning to the exchanges that strong verification and monitoring measures are essential for maintaining the safety and reliability of the crypto market.
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