Ireland’s financial watchdog has handed Coinbase Europe a hefty €21.5 million fine—roughly $25 million—for letting suspicious transactions slip through the cracks like water through a broken net. The Central Bank of Ireland discovered that Coinbase’s anti-money laundering systems had some serious glitches that allowed shady activity to go unnoticed for over a year. Central banks like the Central Bank of Ireland play a crucial role in maintaining financial stability by ensuring institutions comply with regulations.
The problems started with three coding errors in Coinbase’s transaction monitoring system during 2021 and 2022. These bugs caused five out of 21 monitoring scenarios to fail completely. One particularly troublesome issue involved crypto wallet addresses with special characters that the system simply couldn’t read properly. It’s like having a security guard who can’t see certain types of suspicious behavior because their glasses are foggy.
The scale of this oversight was massive. Over 30 million transactions worth approximately €176 billion went unmonitored for about 12 months. That represents nearly one-third of all transactions on Coinbase Europe during that time period. To put this in perspective, it’s like a bank security system taking a year-long nap while billions of dollars moved around unchecked.
When Coinbase finally discovered these problems and conducted a thorough review, they found some disturbing patterns. The company ended up filing 2,708 late suspicious transaction reports with Irish authorities. These flagged transactions were linked to money laundering, fraud, drug trafficking, cyberattacks, and even child exploitation. The suspicious activity totaled around €13 million in value.
This penalty marks the first major enforcement action against a cryptocurrency provider in Ireland for anti-money laundering violations. The original fine was actually €30.7 million, but Coinbase received a 30% discount for cooperating with investigators and admitting to the breaches.
The Central Bank of Ireland made it clear that following anti-money laundering rules is “non-negotiable” for all financial institutions, including crypto companies. This case sends a strong message to the entire cryptocurrency industry that regulators are watching closely and expect proper safeguards to be in place. Additionally, the company failed to conduct extra checks on 184,790 transactions that required additional scrutiny.
Coinbase has since strengthened its compliance systems and removed problematic customers from its platform. The company is also transferring its business from Ireland to Luxembourg at the end of this year. The fine still awaits final approval from Ireland’s High Court.
