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- Coinbase Europe fined €21.5M for AML software errors.
- Coding issues caused partial transaction monitoring, affecting $202B in transactions.
- Exchange strengthens monitoring system to prevent future compliance gaps.
Coinbase Europe Limited, the European arm of the US-based crypto exchange, has agreed to a €21.5 million ($24.7 million) settlement with the Central Bank of Ireland. The fine comes after the regulator identified technical failures in Coinbase’s transaction monitoring system, affecting compliance with Irish Anti-Money Laundering (AML) rules between 2021 and 2022.
Technical Errors Led to Partial Transaction Screening
According to Coinbase, coding issues in its transaction monitoring software caused certain transactions to be only partially screened for suspicious activity. The internal review detected the problem, which was fixed within weeks. Coinbase later re-examined all impacted transactions, filing roughly 2,700 suspicious transaction reports covering $15 million, out of 185,000 reviewed. While these filings do not indicate confirmed illicit activity, they were required under Irish AML regulations.
The total value of transactions during the review period exceeded $202 billion, representing about 31% of Coinbase Europe’s activity at the time.
Central Bank of Ireland Bases Fine on Revenue
The Central Bank calculated the fine relative to Coinbase Europe’s average annual revenue in Ireland between 2021 and 2024, estimated at $480 million. As a registered virtual asset service provider, Coinbase is legally obliged to maintain systems capable of detecting and reporting potential money-laundering risks. The compliance lapse stemmed from three coding errors in five of 21 monitoring “scenarios,” which failed to screen certain crypto addresses.
Compliance Upgrades to Prevent Future Issues
Coinbase says it has strengthened oversight of its Transaction Monitoring System. Improvements include more rigorous pre-deployment reviews, expanded scenario testing, and ongoing updates to identify evolving high-risk activities. “Coinbase recognizes the importance of effective AML procedures and takes our obligations under AML legislation very seriously,” the company stated.
Also Read: Coinbase Nears $2 Billion BVNK Acquisition to Accelerate Stablecoin Payments Expansion
The fine and subsequent upgrades come as Coinbase continues to expand its European operations. Since opening in Dublin in 2018, Coinbase has positioned Ireland as its European crypto hub, especially in anticipation of the EU-wide Markets in Crypto-Assets (MiCA) regulation.
The settlement underscores the growing scrutiny crypto exchanges face from European regulators. While Coinbase has addressed the compliance gaps, the fine highlights the high stakes of maintaining robust AML systems in a rapidly evolving crypto market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
