In a recent development, Coinbase Hit With $24.7M Fine after regulators in Ireland identified gaps in the company’s anti-money laundering (AML) monitoring system. The fine, amounting to €21.5 million, was issued by the Central Bank of Ireland (CBI) following coding errors that left a portion of customer transactions unscreened between 2021 and 2022. Coinbase said it discovered and corrected the issue soon after detection, fully cooperating with authorities throughout the process.

What Triggered the Fine

The Central Bank of Ireland announced that Coinbase Europe Limited (CBEL), the exchange’s Irish entity, had failed to properly monitor millions of transactions due to technical faults in its transaction monitoring system. These errors led to partial screening of certain transactions, a breach of AML and counter-terrorist financing obligations under Irish law.

Hubspot CBI, over 30 million transactions, worth an estimated €176 billion, were affected during a 12-month period, representing nearly one-third of Coinbase Europe’s total activity. The regulator described the lapse as a “critical compliance failure”, marking the first enforcement action against a crypto firm under Ireland’s updated sanctions framework.

CBEL was required to maintain a system that tracks suspicious financial activity through specific transaction monitoring “scenarios”. Coinbase later revealed that three coding errors disrupted five of its 21 scenarios, preventing complete screening in 2021 and 2022. Once the issue was identified, Coinbase fixed the errors within weeks and reprocessed the affected transactions through the corrected system.

The Review and Reporting Process

After re-screening, Coinbase reviewed around 185,000 transactions out of nearly 97 million conducted during the affected period. From that review, approximately 2,700 suspicious transaction reports (STRs) were filed with Ireland’s Financial Intelligence Unit, covering a total of about €13 million in activity.

The CBI clarified that the filing of STRs does not necessarily mean criminal conduct was confirmed, but rather that Coinbase had a duty to report transactions that appeared suspicious under AML regulations.

It took Coinbase nearly three years to fully complete this retrospective monitoring process. The regulator noted that the reported STRs included 疑惑 linked to activities such as money laundering, fraud, ransomware, drug trafficking, and other potential crimes.

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Coinbase’s Response and Remedial Steps

Coinbase publicly acknowledged the fine in a blog post titled “Resolving Past Transaction Monitoring Errors”. The company emphasized that the issue stemmed from unintentional coding mistakes rather than negligence, and that it took immediate action once the problem was identified.

Beyond fixing the technical faults, Coinbase enhanced its transaction monitoring framework by introducing additional testing protocols, code review procedures, and oversight mechanisms. The firm also expanded its monitoring “scenarios” to detect evolving high-risk behaviors and implemented stricter internal audits before deploying code changes.

In its statement, Coinbase reiterated its ongoing commitment to compliance and transparency, saying:

Regulatory Context in Europe

The settlement arrives as European regulators tighten AML scrutiny across the crypto industry. Coinbase’s fine in Ireland follows earlier enforcement in the UK, where its subsidiary CB Payments Limited was fined £3.5 million in 2024 for breaching compliance restrictions.

Regulators in France, Austria, and Italy have also been ramping up AML inspections ahead of the European Union’s Markets in Crypto-Assets (MiCA) regulation, set to take effect soon. These measures aim to ensure uniform standards for crypto platforms operating across the EU.

For Coinbase, Ireland remains its European operational hub, established in 2018. The company selected Dublin as its base for MiCA licensing, allowing future access to all 27 EU member states under a single regulatory framework.

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What This Means for Global Crypto Compliance

The case of Coinbase Hit With $24.7M Fine highlights the growing pressure on global exchanges to maintain strong and dependable anti-money laundering controls. While Coinbase identified and corrected the errors internally, the incident underscores the importance of proactive compliance in an increasingly regulated crypto landscape.

As the company continues to expand its European operations, maintaining trust with regulators and customers alike remains central to its strategy of being “the most compliant exchange in the world”.