Coinbase Europe Fined €21.4M by Irish Central Bank Over AML Monitoring Failures

Highlights:

• Coinbase Europe has been fined €21.4M after technical faults delayed suspicious transaction reporting obligations.
• Coinbase has enhanced its monitoring systems to prevent future compliance failures.
• The fine followed the detection of coding errors that left €176 billion worth of transactions unscreened.

The Central Bank of Ireland has fined Coinbase €21.4 million for serious failures in its transaction monitoring systems between 2021 and 2022. The regulator said the lapses exposed weaknesses in Coinbase’s ability to detect suspicious activity under anti-money laundering laws. The fine followed an investigation into how Coinbase Europe screened transactions during the two years.

🚨UPDATE: COINBASE EUROPE LIMITED (CBEL) REACHES SETTLEMENT WITH CENTRAL BANK OF IRELAND, AGREES TO PAY €21.5 MILLION FINE OVER MONITORING OBLIGATION BREACHES LINKED TO 2021–2022 CODING ERRORS

— BSCN Headlines (@BSCNheadlines) November 6, 2025

According to the regulator, more than 30 million transactions were not properly monitored. These transactions were valued at €176 billion, or about $203 billion, and accounted for nearly 31% of Coinbase Europe’s total transaction volume in that time. The issue originated from three coding errors that caused Coinbase’s system to skip some crypto addresses separated by special characters.

Coinbase discovered the fault through its own internal testing. The company said it fixed the problem within weeks and later reviewed all affected transactions. The central bank stated that Coinbase cooperated throughout the investigation and accepted responsibility. It applied a 30% settlement discount under its enforcement policy after Coinbase admitted the contraventions.

Colm Kincaid, Deputy Governor of the Central Bank, said effective transaction monitoring helps prevent financial crime. He noted that when such systems fail, criminals exploit the gap. Kincaid added that the bank expects all virtual asset service providers to maintain strong controls and report suspicious activities promptly.

Coinbase Europe Fined After System Errors Delayed Suspicious Reports

The fine stemmed from Coinbase’s delay in monitoring thousands of transactions flagged by its faulty compliance software. The faults in the coding system caused Coinbase to leave some transfers unmonitored for money laundering or terrorism financing risks. Coinbase identified the problem internally, fixed it, and started a systematic look to find misplaced alerts.

Following the retrospective review, Coinbase submitted 2,708 suspicious transaction reports to the Irish Financial Intelligence Unit. These filings covered transactions with potential links to money laundering, fraud, cyberattacks, and child exploitation. Coinbase said none of the reviewed transactions were confirmed as illicit, but it reported them in accordance with Irish AML requirements.

The Central Bank emphasized that delayed reports reduced the effectiveness of Ireland’s broader financial crime prevention framework. Law enforcement agencies rely on timely alerts to trace criminal funds, Kincaid said. He cautioned that failure to promptly identify suspicious activity helps give illicit actors room to escape supervision.

Coinbase reacted by improving monitoring controls and instituting new pre-deployment tests of its monitoring systems. The exchange also enhanced scenario testing and continuous risk detection measures. Coinbase stated that it now subjects its compliance tools to strict internal review before launch.

Coinbase said it designed the steps to enhance controls and avoid similar incidents in the future. The company confirmed its intentions to adhere to all AML requirements. It said it is still collaborating with regulators to promote best practices of compliance and transparency. Meanwhile, in the United States, Coinbase has insisted that the GENIUS Act should not go beyond the limits established by the legislators in its feedback to the U.S. Treasury.

We submitted @coinbase's response to @USTreasury's request for comments on the implementation of the GENIUS Act. Our message is simple: GENIUS is landmark legislation designed to make the US the undisputed global leader in crypto and stablecoins. To make that happen, the… pic.twitter.com/XLyq15u0Ov

— Faryar Shirzad 🛡️ (@faryarshirzad) November 5, 2025

Coinbase Shifts European Base to Luxembourg

Coinbase relocated its European regulatory base from Ireland to Luxembourg in June. The company said the move aligned with Europe’s Markets in Crypto-Assets (MiCA) rules, which allow cross-border operations within the EU. Reports indicated some friction with the Bank of Ireland, though Coinbase described Luxembourg’s legal framework as more advanced for digital assets and tokenization.

Tom Duff Gordon, Coinbase’s Vice President of International Policy, said Ireland’s regulators have become more positive toward crypto innovation. He added that the central bank has shifted toward a balanced approach to supervision. Coinbase said it remains committed to maintaining rigorous AML controls and will continue strengthening its compliance operations across Europe.