Coinbase Europe Limited, the European arm of U.S.-based crypto exchange Coinbase, has agreed to pay a €21.5 million ($24.7 million) settlement to the Central Bank of Ireland after a series of coding errors caused lapses in its anti–money laundering (AML) transaction monitoring system between 2021 and 2022.
In a statement released Thursday, Coinbase acknowledged that technical issues led to partial screening of some transactions for suspicious activity. The company said the issue was discovered through internal testing, remediated within weeks, and followed by a comprehensive review of all impacted transactions.
Following the review, Coinbase Europe filed 2,700 suspicious transaction reports (STRs) related to transactions worth roughly $15 million, out of a total of 185,000 flagged transactions during the affected period. While these filings do not necessarily indicate illegal behavior, the exchange said they were submitted in line with Irish AML obligations.
According to reporting by the Irish Independent, the transactions under review represented approximately 31% of all Coinbase Europe transaction volume during that period, with a combined value of more than $202 billion.
Regulator cites compliance failures
The Central Bank of Ireland said the fine was determined based on Coinbase’s average annual Irish revenue between 2021 and 2024, estimated at around $480 million.
As a registered virtual asset service provider (VASP), Coinbase is required to maintain robust systems capable of identifying and reporting potential money-laundering activity. The investigation found that three coding flaws in five of Coinbase’s 21 monitoring “scenarios” caused the software to miss screening certain crypto wallet addresses, particularly those separated by special characters.
Coinbase emphasized that the problems were technical rather than procedural and that no customer funds were compromised.
Coinbase tightens oversight and testing
In response, the company said it has strengthened its compliance testing and governance frameworks, introducing:
- Stricter pre-deployment reviews for new monitoring code;
- Expanded scenario testing to identify potential system vulnerabilities;
- Ongoing enhancements to detect high-risk behaviors as money-laundering typologies evolve.
“Coinbase recognizes the importance of effective AML procedures and takes our obligations under AML legislation and regulatory guidance very seriously,” the company said in a statement.
Ireland as Coinbase’s European hub
Coinbase established its Dublin office in 2018 and received an e-money license a year later making it one of the few crypto firms formally recognized by Irish regulators at the time.
In 2023, the exchange selected Ireland as its primary European base ahead of the EU’s Markets in Crypto-Assets (MiCA) regulatory framework, positioning it to operate seamlessly across all 27 EU member states.
The Irish central bank’s action comes as European regulators tighten oversight on crypto firms’ AML and compliance operations amid rising institutional adoption and on-chain financial activity.