Ireland’s central bank has fined Coinbase Europe €21.5 million for failing to properly monitor millions of transactions, including some linked to criminal offences.
Summary
- Over 30 million transactions worth €176 billion were not fully monitored due to coding errors in Coinbase’s system, with 2,708 later flagged as suspicious.
- Coinbase corrected the errors within weeks and has enhanced its monitoring and testing procedures to prevent recurrence.
- The €21.5 million fine was reduced from €30.7 million through a settlement discount.
30 million transactions slipped through Coinbase monitoring
Ireland’s central bank has imposed a €21.5 million ($25 million) fine on Coinbase Europe, the Irish subsidiary of the U.S.-based crypto exchange, for failing to meet anti-money laundering and counter-terrorism transaction monitoring requirements.
The regulator said configuration errors in Coinbase’s monitoring system left over 30 million transactions—valued at more than €176B—were not properly monitored over a 12-month period, including transactions linked to money laundering, fraud, drug trafficking, cybercrime, and child exploitation.
The authorities said that it took Coinbase almost 3 years to fully review the affected transactions, ultimately flagging 2,708 as suspicious.
Coinbase attributed the matter to three coding mistakes that affected 5 of its 21 monitoring scenarios, which prevented full screening of certain transactions in 2021 and 2022. The company said the errors were corrected within 2-3 weeks of detection. Coinbase also stated that it has implemented measures to prevent similar errors in the future.
Under the settlement, the central bank clarified that the €13M in suspicious transactions identified do not necessarily indicate that any criminal activity actually occurred. The final fine was set at €21.5 million, reduced from the initial €30.7 million through a settlement discount and in consideration of Coinbase Europe’s average annual revenue of €417 million during the relevant period.