Central Bank of Ireland Fines Coinbase Europe $24.8M for AML Violations

• The Central Bank of Ireland has fined Coinbase Europe € 21.5 million ($ 24.8 million) for anti-money laundering breaches.
• Coinbase failed to monitor €176B across 30M transactions due to system configuration faults.
• Coinbase Europe agreed to reforms, including enhanced monitoring and internal controls.

The Central Bank of Ireland (CBI) has fined Coinbase Europe Limited (CBEL) $24.8 million (€21.5 million) for breaching anti-money laundering (AML) and counter-terrorist financing (CFT) rules.

 This is the first legal action that Ireland has enforced against a cryptocurrency company. The fine is the result of an investigation into the failures in transaction monitoring between 2021 and 2022. 

Faulty Monitoring System Affected €176 Billion in Transactions.

According to the Central Bank of Ireland, configuration faults in Coinbase Europe’s monitoring system affected more than 30 million transactions over 12 months. The total value of these transactions exceeded €176 billion, representing about 31% of all transactions during that period.

Regulators pointed out that virtual asset service providers must actively monitor all customer transactions. However, when a transaction raises suspicion of money laundering or terrorist financing, companies must file a Suspicious Transaction Report with Ireland’s Financial Intelligence Unit and Revenue Commissioners.

Additionally, Coinbase Europe conducted a re-examination of the affected transactions, which took more than three years to complete. This review resulted in the submission of 2,708 Suspicious Transaction Reports to the Financial Intelligence Unit for assessment and potential investigation.

Coinbase Implements Corrective and Preventive Measures

Building on this sentiment, Coinbase made a set of defensive measures to prevent the reemergence of errors. The company also strengthened its testing and monitoring systems to identify potential issues before implementing any code-related changes. Coinbase additionally strengthened the oversight of its transaction-monitoring systems, providing greater control and visibility on how its systems perform.

In addition, the company acknowledged the confirmed violations and accepted the factual findings detailed in the Central Bank’s Settlement Notice. Under the agreement reached between both parties, the Central Bank decided that the appropriate sanctions included a formal reprimand and a monetary fine totaling €30,663,906.

Additionally, following a 30% reduction by the settlement discount scheme, the remaining penalty was EUR 21,464,734. Coinbase Europe has accepted these sanctions and awaits approval from the High Court before they become legally enforceable.