The Central Bank of Ireland has imposed a massive fine of €21.5 million on Coinbase Europe for severe breaches of anti-money laundering (AML) rules. The crypto asset and wallet services provider failed to properly monitor more than 30 million transactions—worth over €176 billion—for potential money laundering or terrorist financing over a 12-month period.
This penalty marks the fourth-biggest financial sanction ever issued by the Irish financial regulator and is the first-ever sanction imposed on a player in the Irish crypto sector.
“Crypto has particular technological features… which, together with its anonymity-enhancing capabilities and cross-border nature, makes it especially attractive to criminals,” said Colm Kincaid, a Central Bank deputy governor. He stressed the importance of robust controls to identify and report suspicious transactions.
Key Findings of the Central Bank:
- Breach: Faults in the configuration of Coinbase Europe’s transaction monitoring system (TMS) meant that approximately 31% of all its transactions during the period were not properly screened.
- Resulting STRs: Following a review, Coinbase Europe filed about 2,700 Suspicious Transaction Reports (STRs), which contained suspicions related to serious criminal activities including fraud, drug trafficking, cyberattacks, and money laundering.
- Company Response: Coinbase confirmed the problem stemmed from three coding errors that affected five of its 21 monitoring scenarios in 2021 and 2022. The firm stated these errors have since been fixed, and it recognizes the importance of effective AML procedures.
The monitoring issues mirrored earlier problems at the US parent company, Coinbase Inc., which resulted in a separate $50 million (€43.4 million) fine from the New York State Department of Financial Services. Coinbase Europe had outsourced its transaction monitoring to the US entity.
